Industrial and Commercial Bank of China (Asia) Ltd, the Hong Kong unit of Chinese mainland's biggest bank, said it's in talks to buy Mizuho FinancialsgroupsInc's retail unit, a purchase that would almost double its network in Hong Kong.

　　The firm has started "preliminary discussions" with Chekiang First Bank Ltd, ICBC (Asia) said, confirming an earlier report in the Hong Kong Economic Times that its Beijing-based parent may buy the Mizuho unit.

　　Industrial and Commercial Bank of China wants to use Hong Kong as a center from which it can expand earnings beyond the Chinese mainland as a growing number of its biggest customers do business overseas. Buying Chekiang First Bank would add a tota of 17 outlets to ICBC (Asia)'s 20 branches and give it another HK.8 billion (US.56 billion) worth of assets.

　　Chekiang First Bank said last Tuesday that Mizuho is selling the Hong Kong lender as it reduces its overseas investments.

　　Mizuho, Japan's biggest bank, is trying to raise funds to set against bad loans in Japan.

　　ICBC (Asia) said no time frame has been set for the negotiations.

　　"Chekiang would fit well with ICBC Asia," Steven Chan, a banking analyst at G.K. Goh Securities HK Ltd, said. Chan estimates the price paid should be between 0.8 times and 1.2 times book value.

　　ICBC (Asia) may have competition in any effort to acquire Chekiang First Bank. Bank of East Asia Ltd is also interested in buying the lender, the Apple Daily newspaper reported.

　　Chekiang reported profit fell 6.3 percent to HK million last year.