BEIJING : Bank of China Hong Kong said it had bought 4.94 percent of rival Bank of East Asia (BEA) for 3.95 billion Hong Kong dollars (506.4 million dollars).

The deal, aimed at diversifying Bank of China Hong Kong Group's investment portfolio, will be financed entirely by the group's internal resources, it said in a statement filed with the Hong Kong stock exchange late on Monday.

The shares were purchased from an independent third party, said the statement, without identifying the seller.

The group currently has no intention or agreement to have board representation on BEA, or to involve itself in the management or operation of BEA, it said.

Other than ordinary inter-bank business relationship, both banks will continue to be run independently, it added.

Bank of East Asia is the largest independent local bank in Hong Kong, with total consolidated assets of 343.2 billion Hong Kong dollars as at June 30, 2007, according to the bank's website.

It was incorporated in mainland China in April and expects to launch businesses including fund management, credit card and private banking in the country next year.

- AFP/ir