China will continue deepening the reform of banking industry this year, with focuses on the introduction of a shareholding system in Agricultural Bank of China (ABC) and the reform of China Development Bank (CDB), Premier Wen Jiabao said Wednesday.

"We will speed up reform of the financial system and strengthen financial oversight," said Wen while delivering a government work report at the First Session of the 11th National People's Congress, the top legislature.

In early February, ABC spokesman Zhou Qingyu said the bank would go public "at an appropriate time" after it finishes the financial restructuring, as well as incorporation, and introduces strategic investors.

"It could be any time in the next three years," he said.

The bank reported a profit of 96 billion yuan (about 13.3 billion U.S. dollars) last year, up 64 percent from 2006.

In 2007, the ABC's deposit business increased 549.7 billion yuan, while its loan business increased 330.4 billion yuan. It also cleared 57.4 billion yuan in bad loans.

A reform plan of the CDB ratified by the State Council in mid-February will turn the policy bank to a commercial lender, earlier reports said.

According to the plan, the CDB will go through a series of reforms including restructuring, company management framework adjustment and going public when the time is right.

The move ended a four-year discussion on the CDB's commercialization, prolonged by considerations of the bank's special status and low capital adequacy ratio.

The CDB is required to set up a stock company within six months after the plan is fixed. Chen Yuan, governor of the lender, will probably be the board chairman, reported by Shanghai Securities News.

After the commercialization, the lender is to expand wholesale banking businesses and market investments besides continuing to support the country's key sectors and priority projects, the source said.

Market analysts said middle- and long-term wholesale loans will continue to be the CDB's main business. The bank may not rush into competition with other commercial banks in retailing sector soon because of limited branches and proficiency in doing wholesale banking business.

The CDB now owns 32 branches and four representative offices nationwide.

In December, Central Huijin Investment Co., an investment arm of the Chinese government, injected 20 billion U.S. dollars into the CDB, sharply raising its capital adequacy and improving its risk-prevention capability.

The CDB is one of the country's three policy banks, the other two being the Eximbank and the Agricultural Development Bank. Its main businesses includes funding the development of infrastructure, basic industries, pillar industries as well as top-priority State projects.

(Xinhua News Agency March 5, 2008)