Bank of China plans to $1 billion in a railway project. The bank is using the opportunity to benefit from the Government’s infrastructure expansion scheme.
Bank of China which is China ’s third biggest lender plans to invest $878 million in a railway project connecting Shanghai and Beijing .
Bank of China Group Investment planned to pay $1.1 billion for a 14.5 percent stake in a railway operator using foreign currencies.
The company designated to build the high speed railway will soon be established with 51.9billion Yuan in registered capital.
A Beijing based lender said in a statement to Shanghai Stock Exchange that the investment would generate reasonable returns and it would help the bank to diversify its services.
The lender also said, “It will also help the bank win more businesses in China ‘s large-scale railway investment and construction, which is in line with our development strategy.”
Bank of China, last month said that it had agreed to buy 4.5 percent stake in Beijing-Shanghai High-Speed railway.
Last year, China unveiled a $586 billion infrastructure focused package to boost the railway investment. This helped the railways investment by 67 percent.
Bank of China intends to sell up to 40 billion Yuan worth of bonds that can be converted to Shanghai-traded A shares.
