United Commercial Bank may buy Shanghai’s Business Development Bank Ltd.

“United Commercial Bank plans to make history by purchasing a Shanghai financial institution and becoming the first Chinese American community bank to offer a wide range of services in China. With Business Development Bank Ltd., which United Commercial said Tuesday that it had agreed to buy for $205 million, the San Francisco-based bank could offer its customers a one-stop shop in the U.S. and China. Analysts said the purchase, which must be approved by regulators in both countries, would put pressure on United Commercial’s chief competitors, East West Bancorp Inc. and Cathay General Bancorp, to step up their activities in China. East West and Cathay have been more focused on expansion in California and in cities elsewhere in the U.S. with large Chinese American communities. The opening of China’s financial sector, a condition of the country’s entry into the World Trade Organization, has sparked fierce competition even though operating a bank in China carries notable risks, such as an uncertain regulatory climate, a lack of transparency and volatile real estate and stock markets… The Shanghai bank, which would become a unit of United Commercial, operates a branch in the city of Shantou and a representative office in Beijing. United Commercial operates 66 U.S. locations, mostly in California, plus a branch in Hong Kong and representative offices in Shanghai and Shenzhen, China, and in Taipei, Taiwan. The Shanghai bank is currently allowed to lend to only foreign-invested companies or individuals, but Downing said United Commercial would apply for permission to expand that service to locals.”