ICBC accelerates restructuring

The Industrial and Commercial Bank of China (ICBC) is beefing up its restructuring to prepare the ground for its initial public offering, according to a senior bank official.

"We are making greater efforts to clear up non-performing loans," said China's leading English newspaper China Daily said, quoting the bank's vice president Yang Kaisheng from his address at a financial conference.

Yang said his bank brought down its ratio of non-performing loans by 2 percent to 19.1 percent last year.

ICBC may receive a capital injection as high as 50 billion US dollars from the government, analysts estimated. In 2003, Bank of China (BOC) and the China Construction Bank (CCB), two pilot banks among the "big four" to go public, received a combined capital injection of 45 billion US dollars from the People's Bank of China, the nation's central bank.

But market observers warn that the two pilot banks, if both considering a Hong Kong listing, may have to deal with another obstacle, as the Central Huijin Investment Co is the controlling shareholder in both banks, this may disqualify them from listings, according to Hong Kong Stock Exchange rules.

However, "the government will solve this problem and the two banks will qualify for a Hong Kong listing," Yang said at ease.

For ICBC, there is another option - the Ministry of Finance may inject capital by issuing special bonds, noted industry insiders.

Central bank officials said earlier that the government will take different measures in restructuring the "big four State commercial lenders."

The central bank is also trying to reduce risks in the banking industry by raising both the mortgage rate and maximum down payment levels.

Commercial banks are required to charge mortgage rates of no less than 90 percent of the central bank's benchmark interest rate, and it raised the down payment limit from 20 to 30 percent.

Source: Xinhua