China's Industrial Bank said on February 5 it would focus on preparing for a final stock listing this year and in 2005.

Industrial Bank, formerly known as the Fujian Industrial Bank, said it earned 1.63 billion yuan (US$196.3 million) in profits last year, an increase of 250 percent over 2000.

By the end of last year, the bank's total assets stood at 250 billion yuan (US$30.1 billion), three times the amount in 2000.

Its total amount of savings deposits topped 200 billion yuan (US$24.1 billion) in the same period, quadrupling figures from 2000. At the end of last year, the bank's non-performing loan rate, by the international standard of five category classification, stood at 2.39 percent.

"Listing will be the core of our work this year and next," Industrial Bank Chairman Gao Jianping said at a working conference in Fuzhou, the capital of East China's Fujian Province.

"Industrial Bank will speed up reforms in the coming two to three years and try to build it into a first-class bank with good corporate governance and a strict internal control mechanism," he said.

This year, Industrial Bank will speed up business innovation and market expansion, Gao said.

It will also beef up internal risk control measures, he said.

As one of the country's few lenders with cleaner balance sheets, Industrial Bank has already taken a series of measures to further increase its competitiveness.

The bank issued 3 billion yuan (US$361 million) in subordinated bonds to boost its capital in December, the first such move under the government's new regulations.

Under the new rules by the China Banking Regulatory Commission, commercial banks are allowed to recapitalize by issuing long-term subordinated bonds.

Industrial Bank also agreed in December to sell 24.98 percent of its stake to three foreign banks.

According to the agreement, the three foreign banks - Hang Seng Bank, International Finance Company (IFC) and GIC Special Investment - would buy 999 million shares, or 24.98 percent of the Industrial Bank's stake, with an investment of 2.7 billion yuan (US$324.98 million).

The three foreign banks would also beef up cooperation with Industrial Bank in aspects such as risk management, financial management and retail business.

Gao said the introduction of the three international financial institutional investors would greatly improve the bank's corporate governance and business management.

Many players in China's banking industry have been deep in talks with potential foreign investors since China became a member of the World Trade Organization in 2001.

By introducing foreign financial institutions as equity owners, Chinese banks are expected to obtain first-class management expertise to help them survive the mounting competition, said Zhang Liqun, a senior researcher with the Development Research Center under the State Council.

(China Daily February 6, 2004)