A Chinese business group has bought more than a quarter of the stock of Saxo Bank.

It may not seem like the most logical business for an automotive manufacturer to invest in, but Saxo Bank has become a portfolio company of Geely Internatiional Hong Kong, a subsidiary of Zhejiang Geely Holding Group Co. Geely is the owner of Swedish carmaker Volvo and the maker of London's iconic black cabs.

Co-founder of Saxo Lars Seier Christensen has agreed to sell his 25.71 per cent stake in the Denmark-headquartered bank to Geely, pending regulatory approvals. Christensen served as co-chief executive until year-end 2015.

Certain minority shareholders are expected to exercise tag-along rights as part of the investment offer from Geely, which is expected to own 30 per cent of Saxo on completion, Saxo Bank said in a statement
yesterday. 

Financial terms of the transaction, which is expected to be finalised by the fourth quarter of 2017, have not been disclosed.

The deal is yet another example of Chinese groups seeking to snap up Western assets and diversify earnings. In private banking, for example, China’s Fosun International has made a name for itself as an acquirer – or suitor – for European wealth management and banking operations, as well as in developing its own businesses. Fosun bought Hauck & Aufhäuser, the venerable German private banking and financial firm, about 18 months’ ago. In October 2015, Fosun said it launched a financial platform for its investment and asset management business in Russia and neighbouring countries. 

“Geely Group has shown an impressive ability to foster sharp and solid profitable growth in their portfolio companies, and it has a deep understanding of Scandinavian business values and culture,” Kim Fournais, Saxo co-founder and chief executive officer, said.

Saxo established a China office in the Shanghai Free-Trade Zone in September 2015, and has since then signed fintech partnerships as part of its Greater China strategy.

Founded in 1992 and headquartered in Copenhagen, Saxo employs more than 1,500 people in financial centres around the world including London, Singapore, Paris, Zurich, Dubai and Tokyo.

Besides Geely, other significant shareholders are TPG Capital, the US fund with almost 30 per cent, and Saxo co-founder, Kim Fournais, with 25.71 per cent.

In March, Geely reported that its 2016 net profit more than doubled to RMB5.1 billion ($741 million), its strongest growth since 2008 (source: Reuters).