A Bank of China (BOC) spokesman confirmed at a press conference on Tuesday that the leading state bank is seeking to list later this year.

"We are making active preparations for the market listing, but the share-offering depends on an opportunity and window to the market. We are doing our best (to list this year)," said Wang Zhaowen, a BOC spokesman, at a press conference.

His optimism rides on the back of the bank's strong performance last year. Its operating profits surged from 21.3 percent in 2003 to 57.8 billion yuan (US$7 billion) in 2004. Net profits amounted to 20.9 billion yuan (US$2.5 billion), on par with the 2003 figure.

Wang said that the bank's negotiations with potential strategic investors, who will buy its shares and help streamline its operations, is "well under way." Citing a "commercial secret concern," he declined to say which financial institutions the bank was talking with.

"They are from European and Asian countries, as well as the United States. The negotiations have made some progress," he said.

In the last few decades, China's state banks were treated as a source of money to prop up failing government companies. This has left them debt-ridden and with little capital to meet regulator requirements, analysts say.

Bank reform is now even more urgent as China prepares to meet its commitments to the World Trade Organization, including opening its financial markets to foreign competitors by 2006.

The government has selected the BOC and China Construction Bank (CCB) to spearhead the sweeping reforms. At the end of 2003, the two received a combined US$45 billion in foreign exchange reserves from the central government in a bailout plan to help boost their capital bases.

Both BOC and CCB have been transformed into joint-stock enterprises and have introduced the concept of corporate governance into their operations.

Figures released on Tuesday show that the BOC's capital adequacy ratio, a measure of its own capital to total lending, had climbed to 10.04 percent by the end of last year. This is above the 8 percent international requirement for a commercial bank.

Its non-performing loan (NPL) ratio stood at 5.12 percent.

Guo Shuqing, the CCB chairman, said earlier that his bank had finished its prospectus for listing and is also trying to go public this year.

Industrial insiders predict that the BOC and CCB will list either in Hong Kong, New York or London.

The China Banking Regulatory Commission has said the reform of the two other state banks, the Industrial and Commercial Bank of China (ICBC) and Agricultural Bank of China (ABC), would also be advanced.

Last month, China announced plans to inject US$15 billion into the ICBC, the country's biggest state-owned commercial bank, in a bid to turn it into a profitable, independent competitor. The bank will use the money to replenish its financial reserves.