By Chen Aizhu
BEIJING (Reuters) - CEFC China Energy, a privately-owned conglomerate which is buying a stake in Russian state oil firm Rosneft, plans to launch its own bank early next year in a latest step to build financial muscle along with its oil and gas assets, two company executives said.
But the Shanghai-based company's rapid ascent has prompted some international bankers and traders to warn about its lack of transparency, and dealings with sanctioned Russian firms.
A CEFC-controlled bank is expected to win Chinese regulatory approval early next year, with a registered capital of 5 billion yuan ($755 million), the executives said, making CEFC one of the few energy companies anywhere to run a private commercial bank.
State-owned China National Petroleum Corp (CNPC) controls Bank of Kunlun, which conducts businesses including oil transactions with Iran.
The executives declined to be named due to company policy.
A spokesperson for CEFC said he couldn't immediately comment.
CEFC's plan comes just weeks after the company agreed to buy a stake of just over 14 percent in Rosneft, the world's largest listed oil company, catapulting the little-known Chinese trader into a global energy firm.
Having a bank will give CEFC greater financial clout to trade when it's handling almost 1 million barrels per day of Russian oil, and the ability to finance physical deals for Chinese customers, including independent refiners, the executives said.
"The energy business involves a huge amount of financing, and our customers are scattered," said one of the executives involved in the plan. "We believe that only by enhancing our financial services could we make our energy business more competitive."
The executive said the Shanghai municipal government approached CEFC and proposed the plan, adding the company will hold a majority stake in the new bank. He did not name any other potential investors.
Banking sources cautioned that CEFC's planned investment in Rosneft, which is sanctioned by the United States, and a lack of transparency in the group's shareholding structure may make western banks cautious about being a counterparty with the planned bank due to compliance reasons.
Some leading western banks have been reluctant to work with CEFC, citing its inability to meet their internal due diligence requirements, or "know-your-customer" checks, people familiar with the matter have said.
EXPANSION
The proposed bank would be part of CEFC's expanding financial portfolio - it already owns a stake in provincial government-backed Bank of Hainan, and runs a chain of financial services including in asset management, securities broking and factoring financing.
CEFC is finalising its acquisition of a 50 percent stake in J&T Finance Group, which has banks operating in the Czech Republic, Russia and Slovakia. The European Central Bank cleared that deal in September - nearly two years after it was first announced.
Another acquisition - of a 20 percent stake in U.S. brokerage Cowen Group Inc - has been delayed due to scrutiny from the Committee on Foreign Investment in the United States (CFIUS), which analyses proposed deals to ensure they don't harm national security.
The Cowen deal was due to close in the third quarter, but the approval process was extended last month.
China has approved 17 privately-run banks since a pilot programme in 2014 to boost private sector investment in a state-dominated sector.
($1 = 6.6213 Chinese yuan renminbi)
(Reporting by Chen Aizhu; Additional reporting by Kane Wu and Sumeet Chatterjee; Editing by Josephine Mason and Ian Geoghegan)
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