Preparation on the share reform of the Agricultural Bank of China (ABC) is almost ready but a specific reform plan is still under study, said ABC president Xiang Junbo on the sidelines of the 17th National Congress of the Communist Party of China yesterday.

Xiang revealed global auditor Deloitte Touche Tohmatsu has finished an audit of ABC's 2005 and 2006 financial reports, and issued credit and non-credit audit results. Meanwhile the National Audit Office has completed a special audit over ABC's non-performing loans. Once the reform plan is approved, financial reshuffle will start immediately, Xiang said.

The president of the last Big Four State-owned bank to carry out an equity transformation reform stressed the importance of capital injection by Central Huijin Investment Co Ltd, an investment arm of the central bank. Xiang said capital infusion by Central Huijin is critical to improving capital structure, lifting the capital adequacy ratio and introducing strategic investors with the bank.

He said ABC might follow a similar path to the other three Big Four banks – the Industrial and Commercial Bank of China, Bank of China and China Construction Bank, all of which welcomed Central Huijin as their largest shareholder in their reforms.

In compliance with the directives by the State Council, ABC will choose an appropriate time for an initial public offering (IPO) only after completion of financial reshuffle, equity transformation and introduction of strategic investors. As the equity reform plan is still under discussion, IPO preparation will not start until the plan is approved, Xiang noted.

"In general, ABC's IPO will learn from successful experience of the other three banks in arrangement and style," Xiang said.

(Chinadaily.com.cn October 18, 2007)