Bank of China to Acquire Hutchison CSFBdirect

Bank of China said Sunday that it would buy a Web-based brokerage from Hutchison Whampoa Ltd. and Credit Suisse First Boston Ltd., betting it can sell online stock services to its customers in the city.

Bank of China is buying Hutchison CSFBdirect, a venture Hutchison formed with Donaldson, Lufkin & Jenrette unit DLJdirect in February 2000. Financial details of the deal, expected to close in May, were not disclosed.

Credit Suisse acquired CSFBdirect when it bought Donaldson, Lufkin & Jenrette in November 2000.

With the sale, CSFBdirect would become the third-biggest Hong Kong Web-based brokerage to close or change hands in four months. Fixed minimum commissions and slumping stock prices have made the city a difficult market for Web-based brokers.

“An established financial institution that can offer a comprehensive range of services has a major advantage in providing online retail brokerage services in this market,” said Dominic Lai, an executive director at Hutchison.

Hong Kong scrapped plans in January to end the minimum stock-trade commission of 0.25% on concern that price competition would cost jobs in a city with record 6.8% unemployment. Stock market trading volume fell by a third last year.