BBC NEWS | Business | RBS leads $3.1bn China investment

BBC NEWS | Business | RBS leads $3.1bn China investment: "Royal Bank of Scotland is to lead a $3.1bn (�1.7bn) investment in Bank of China, giving it control of a 10% stake in China's second-biggest lender.
RBS said it would pump $1.6bn into the deal, which it will head on behalf of co-investors Merrill Lynch and Hong Kong billionaire Li Ka-shing.
Foreign investors are increasingly keen to gain a foothold in China's vast banking sector.
The market alone is estimated to hold $1.5 trillion in personal savings.
However, experts have warned that Western banks risk exposing themselves to China's bad debt problems accumulated after years of state-controlled lending.
China deals
The deal we have announced, from Royal Bank's perspective, is low risk

Fred Goodwin, RBS chief executive


Check RBS's share price
Reports that RBS was considering spending as much as $5bn on the deal had recently hit the Edinburgh-based bank's shares.
News of the more modest investment helped lift RBS's shares on the London Stock Exchange by more than 3% in morning trade.
The deal will give RBS, Europe's second-biggest lender, a 5% holding in Bank of China, though it will control the 10% holding on behalf of its co-investors.
RBS said it planned to sell its stake in Spain's Banco Santander Central Hispano for $1.6bn in order to fund its share of the deal. "