Two leading Chinese banks seek public listings "at appropriate time

The Bank of China (BOC) and China Construction Bank (CCB) are both seeking stock market listings and have to undergo the market's supervision and test, the banking regulator said here Tuesday.

Tang Shuangning, vice-chairman of the China Banking Regulatory Commission (CBRC), told an economic forum that listings of the banks should not be materialized in a hurry.

"When the melon is ripe, it falls off its stem. When the water flows, a channel is formed," he said.

Now the BOC and CCB should gear up "actively and steadily" for the listings by streamlining their operation, Tang said.

The two banks are aiming to be "modern financial enterprises with sufficient capital, stringent internal control, safe operation and sound services and earning capabilities" as requiredby the government.

The BOC and CCB, considered as financially healthier state banks among China's Big Four, and have received a combined 45 billion US dollars in foreign exchange reserves from the central government aiming to bolster their balance sheets.

The bailout has helped the BOC and CCB raise their capital adequacy ratios (CARs) to 8.62 and 9.39 percent, respectively, by the end of 2004.

The BOC's and CCB's non-performing loan (NPL) ratios plunged to5.12 and 3.7 percent, respectively, by the end of last year.

The banks have both become joint-stock firms with relatively standard corporate governance featured by a shareholders' meeting,board of directors, board of supervisors and senior management, which have all started operation. The BOC has done away with all government ranks of its staff, urging its 230,000-strong employeesto vie for new jobs in the bank.

A new company, the Central Huijin Investment Co., was inaugurated as major shareholders of the two banks. It is managed by the current department heads of the State Administration of Foreign Exchange (SAFE) with a board comprising representatives from SAFE, the Ministry of Finance and the central bank. The investment company's major goal is to supervise the restructuring of the banks.

Both BOC and CCB are negotiating with potential strategic investors, the presidents said, but declining to disclose the investors' names, citing "commercial secret concerns." The exchanges the banks would be listed on are also not known, or maybe not finalized.

The CCB saw its operating profits rise 21.5 percent year-on-year to 49.9 billion yuan (6 billion dollars) in the first nine months of last year, while the BOC posted a 22 percent year-on-year surge in profits to 53.6 billion yuan (6.5 billion dollars) in the first ten months.

Source: Xinhua