The Bank of China, one of the country's "Big Four" state-owned commercial lender, said Sunday its non-performing asset (NPA) ratio had declined to 15.6 percent by the end of January and vowed to cut the ratio while preventing the accumulation of new bad debts.

NPA reduction is believed to be a vital job for the bank before it can successfully go public next year as scheduled.

A spokesman said that BOC's business departments had been ordered to investigate "potential NPAs" and to take earlier measures to prevent them from transforming into real problem debts.

Its outstanding NPAs, calculated in line with the internationally accepted five-category loan classification system, stood at 342.6 billion yuan (US$41.3 billion) by the end of January.

The bank either wrote-off or recovered 64.7 billion yuan in NPAs in 2003.

Besides a less severe NPA problem, BOC received a government capital injection of US$22.5 billion at the end of last year, a boost to the state-owned bank's joint-stock reform efforts.

An executive revealed earlier that BOC would try to launch initial public offerings in 2005, a move that will hopefully help the bank upgrade management and sharpen competitiveness.

Under commitments to the World Trade Organization, China will open fully its financial market to foreign banks by the end of 2006.

That explains partly why national banks including the BOC have been going all out to speed up reforms, analysts note.

China's "Big Four" state-owned banks including the Industrial and Commercial Bank of China and BOC are all projected to sell shares sooner or later, but are hindered by the thorny NPA issue.

Analysts noted they poured too much money into loss-making state-owned companies in the past decades.

In a separate statement, BOC said its yuan deposits from companies exceeded a record 800 billion yuan by the end of March.

The bank, known as a national lender specialized in foreign exchange business, recorded new yuan corporate deposits totaling 54.6 billion yuan in the first three months of the year, rocketing 152 percent on an annual basis.

(Xinhua News Agency April 12, 2004)