China Construction Bank Corp has agreed to pay 3.4 billion yuan (US$490 million) for a controlling stake in Hefei Xingtai Trust Co to expand fee-income channels.

The bank will own 67 percent of the trust firm based in Anhui Province, Hefei Xingtai said in a statement on its Website yesterday.

The deal is still subject to regulatory approval. The two parties signed the deal on Tuesday. After the deal, Xingtai Trust's registered capital will rise to 4 billion yuan.

China Construction Bank follows rivals like Bank of Communications and China Minsheng Banking Corp in expanding as an all-round financial player, with arms stretching from commercial banking into trusts, investment banking, aircraft leasing and fund management as competition for loans intensifies.

Chinese banks are seeking more profit generators as regulators loosen the limit on cross-industry financial transactions.

China Construction Bank is the country's second biggest lender and the first that went public overseas. It has more than 13,000 outlets nationwide.

The bank lost 1.81 percent to 7.05 yuan yesterday in Shanghai. The benchmark Shanghai Composite Index tumbled 1.65 percent to 3,485.63.

(Shanghai Daily May 23, 2008)