The Bank of
China (BOC), one of the nation's major four state-owned
commercial banks, said yesterday it has scheduled its initial
public offering for 2005, one year before the market is fully
opened to foreign competitors.
"We hope it's 2005," Hua Qingshan, the bank's executive
vice-president, said in response to a question at a high-profile
conference.
The bank still has a lot to do, including disposing of
non-performing loans, and "the timetable is quite tight," he
said.
Hua said his bank is trying to become a pilot bank in a reform
package the government has tailored for the four State-owned
commercial banks - the BOC, the Industrial and Commercial Bank of
China, China Construction Bank and the Agricultural Bank of
China.
Liu Mingkang, chairman of the China Banking Regulatory
Commission, said earlier this week that the central government had
approved a reform plan for the four and will pick one or two of
them for a trial. The reform will include further disposal of bad
loans, recapitalization and restructuring.
"We are working actively to become one of the pilot banks," Hua
said, adding that the IPO of its subsidiary BOC Hong Kong has
brought his bank some experience that all the other three banks do
not have.
The BOC is pushing wide-ranging reforms that span from creating
a risk management system independent from the management to
streamlining networks and trimming the payroll.
In a related development, Li Zhanchen, vice-president of the
China Great Wall Asset Management Company, said asset management
companies (AMCs) will play a larger role in disposing of China's
huge non-performing loans (NPLs).
"Looking at the current financial situation, asset management
companies will continue to play their specialized role in the
disposal of non-performing loans," Li said.
China established four AMCs in 1999 to specialize in the
disposal of NPLs from the State-owned commercial banks.
The four AMCs had disposed of 498 billion yuan (US$60 billion)
in NPLs as of October this year with a cash recovery ratio of 17.3
per cent, while expenditure totaled 7.6 billion yuan (US$915
million), a competitive 0.54 per cent of total NPLs it took over
four years ago.
Outstanding NPLs at Chinese banking institutions totaled 2
trillion yuan (US$240 billion) at the end of October.
(China Daily December 4, 2003)