Beijing, July 4 (Xinhuanet)—China Construction Bank Corporation (CCB) said it has reached an agreement with Temasek Holdings (Private) Limited on entering into a strategic partnership recently. Accordingly, Temasek will invest in CCB through the Asia Financial Holdings Private Limited (AFH), a wholly-owned subsidiary. AFH will place US$1 billion into CCB at the price of a planned international initial public offering (IPO) for CCB, and will also purchase certain existing shares from China SAFE Investments Limited, subject to regulatory approval.

In addition, AFH will assist CCB in improving corporate governance system, including the right to nominate suitable candidates for election to the CCB Board of Directors. Other areas of collaboration and support are under discussion.

On July 4, a CCB insider said Temasek became the second strategic investor following the Bank of America. The strategic partnership with Temasek demonstrates that it has taken another important step forward in deepening reform and improving corporate governance, and also signifies that its strategic investor negotiation process is basically completed.

CCB, as the second-largest commercial bank in China, has nearly 14,500 outlets. By the end of 2004, CCB had accounted for 12% of the total domestic loans, 13% of the total deposits, and with the total asset of RMB 3,910 billion.

Temasek, as an investment holding company in Asia, manages a diversified global portfolio of 54 billion dollars. And it also holds shares and stakes of many banks in Asian countries and regions.