Fitch Ratings, the international ratings agency, has placed Bank of Asia’s long-term and short-term debt on negative watch following news that ABN Amro, its major shareholder, wants to pull out of the bank.
BOA is developing a retail and small corporate banking franchise, focusing on trade finance and cash management services. The likelihood of ABN Amro withdrawing from BOA appears to have increased after the Cabinet recently approved the Financial Sector Master Plan, which requires foreign-owned banks to maintain a single operating presence either through a branch or a commercial bank subsidiary.
The share price of Bank of Asia (BOA) has been rising significantly on anticipation of a premium from a buy-out of the bank. Analysts said investors should remain cautious, as BOA might be on an up-trend but its prospects remain uncertain.
