The Bank of China (BOC) and China Construction Bank (CCB) -- two of the country's Big Four state-owned banks -- are both targeting stock market listings sometime in 2005, presidents of the banks revealed in Beijing on Tuesday.

BOC President Li Lihui told the central bank-sponsored press conference that the BOC is gearing up for a listing, but that speed will take a back seat to quality.

"We hope that all our financial indices can reach the standard of a listed company at the time of our initial public offering," he said. "The listing date hinges on our preparations and market conditions."

President Chang Zhenming of CCB said that his bank is preparing for the listing by inviting well-known overseas agencies to help audit its business.

Both are negotiating with potential investors -- probably more sophisticated financial institutions -- to buy stakes in the Chinese banks and help them streamline their operations, the presidents said. They declined to reveal the investors' names.

The two presidents did not name the exchanges on which the banks hoped to list.

China chose the BOC and CCB as pilot banks for joint-stock reform and market listing at the end of last year, injecting US$44.5 billion in foreign currency reserves to replenish the banks' capital.

Reviewing their progress during the year, a spokesman for the People's Bank of China --the nation's central bank -- said that such major financial indices as capital adequacy ratio, asset quality, earnings capability and provisions for bad debts of both BOC and CCB have reached or neared those of large international commercial banks.

The two commercial banks have become joint-stock institutions with fairly standard corporate governance systems now operating. Both have shareholders' meetings, boards of directors, boards of supervisors and senior management.

Many banks became heavily laden with nonperforming assets after granting excessive loans to loss-making state-owned enterprises during the past decades.

Li said the BOC's nonperforming loan (NPL) ratio fell to 4.6 percent at the end of October, plunging 11.7 percentage points during the year. Its capital adequacy ratio, a measure of available capital in proportion to outstanding loans, reached 8.6 percent. Operating profit soared 22.0 percent in the first 10 months of the year to 53.6 billion yuan (US$6.5 billion).

Chang said his bank's capital adequacy ratio is 9.4 percent, comfortably above the 8-percent international standard, while its NPL ratio fell to only 3.9 percent at the end of September, the lowest among the Big Four.

China's Big Four also include the Industrial and Commercial Bank of China and Agricultural Bank of China, which are preparing to go public in 2006 and 2007, respectively, according to industry sources.

(Xinhua News Agency December 1, 2004)