The Agricultural Bank of China yesterday signed a cooperation deal with Baosteel Group Co in Shanghai which includes a credit line of 50 billion yuan (US$7.32 billion) to finance the steel maker's growth.

The Beijing-based bank will offer fast track services for the Shanghai-based steel maker over the next three years, including offering settlement, cash management, financial consultancy and assets management services.

"We will make use of our vast outlet and staff network to serve clients like Baosteel," the bank's Chairman Xiang Junbo said yesterday in Shanghai. "It is of great significance for us."

Tu Guangshao, vice mayor of Shanghai, said cooperation between the two parties will help boost the local economy.

Xiang said the bank has been keen in supporting key industries. The bank's credit to China's steel industry is close to 130 billion yuan.

Its new credit this year already amounted to 800 billion yuan, similar to the new credit issued by its big-four state owned peers, including the Industrial and Commercial Bank of China.

"If the bank goes public, it will be the second or the third-biggest bank in the world," Xiang said, without giving specific criteria but mentioning the bank's broad network and staff. The bank has 450,000 employees and a network of 24,400 outlets, half of which are in rural areas.

Xiang declined to disclose a timetable for its listing plan.

He said the bank was in talks with several parties as potential strategic investors but declined to elaborate.

The bank got a US$19-billion government cash injection in November and restructured into a share holding company in January, paving the way for listing.

The bank's total assets amounted to 7.01 trillion yuan at the end of last year, and it recorded a yearly profit of 51.4 billion yuan.

(Shanghai Daily July 9, 2009)