China Development Bank to evaluate tie-up with Barclays

Lackluster performance of banks after two years of partnership forced CDB's board to review relationship.

In July 2007, China Development Bank (CDB), which used to be one of China's three policy lenders directly led by the cabinet and is now transformed into a commercial lender, spent 2.2 billion euros ($3 billion) on a 3 percent stake in Barclays, partly to help the UK bank finance its bid for ABN AMRO at that time.

ABN AMRO was eventually bought by Royal Bank of Scotland Group PLC, while CDB decided to keep its stake in Barclays as the Chinese bank hoped the tie-up could help it expand abroad quickly.

More than two years on, however, not much has happened between the two banks.
"We are now reviewing our ties with Barclays," CDB President Jiang Chaoliang told Reuters on the sidelines of the Chinese People's Political Consultative Conference (CPPCC) in Beijing.

"A review report will be submitted to board members for consideration," said Jiang, a delegate to the CPPCC, the top political advisory body to the Chinese government.
Jiang acknowledged business cooperation between the two banks had been less productive than expected in the past two years, due partly to the global financial crisis, which forced Barclays to put more effort on its organic growth at home.

View the full story in Reuters.