Chinese government likely to inject capital into two more state-owned banks

Two more state-owned banks may receive capital injection from the Ministry of Finance to prepare for public listing, local media reported Wednesday.

The Ministry of Finance will "play an active role" in the expected capital injection, said Tang Shuangning, vice-chairman of the China Banking Regulatory Commission (CRBC), China's banking watchdog, quoted by Wednesday's China Daily.

The Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (ABC) are expected to be recapitalized after the treasury injected 45 billion US dollars in the Bank of China (BOC) and China Construction Bank (CCB) at the end of 2003.

But Tang neither released the timing nor sum of the money involved.

Insiders said that the amount given to the ICBC and ABC may be more than the first two.

All four banks are lining up for going public at home or abroad after becoming joint stock companies.

The listing progress will not be slowed and they will go public when they are ready and when time is ripe, Tang said.

The CRBC will soon approve some pilot banks to set up fund management companies, Tang added.

"We hope that their participation (in the fund management business) will boost the capital market but we will also pay greater attention to risk controls," he said.

Early press reports said that the ICBC and China Merchants Bank are preparing for starting fund management companies and they are promising candidates for pilot banks.

Tang said both banks are possible to be selected but they will have to get approval from the China Securities Regulatory Commission (CSRC) after the CBRC gives the nod.