The Agricultural Bank of China (ABC) has submitted its joint-stock reform plan to the State Council, or the Chinese government's cabinet, said Han Zhongqi, vice-president of the State-owned ABC in his recent interview with media.

At the present, the bank is making use of time to lay a solid foundation in order to get everything ready before the reform, which is focused on all-round restructuring.

"The reform is expected to make a breakthrough this year, as the reform of the State-owned banks will be completed before the full financial opening up at the end of this year as required by the state", said Han Zhongqi.

Han dismissed rumors that the bank's stock reform plan has not obtained approval from the State Council.

He said full consideration of the bank's actual conditions will be made in the reform plan with emphasis on the whole bank restructuring. Although the cost of a one-off reform will likely be large, listing parts of the bank may lead to partial risk enlargement. "The whole reform can bring the bank's role in connecting urban and rural areas and in support of agriculture, countryside and farmers into fuller play."

Han disclosed that it is clearly stated in the bank's stock reform plan that policy-related operation losses born by the bank should be cleared up before corresponding financial restructuring.

After the restructuring, the ABC will choose from the international banks with close strategic cooperative relations as strategic investors. At the present, the bank has established agency relationship with more than 1,000 branches of international banks from more than 100 countries.

"Once everything is ready, the bank will choose strategic investors from these closely cooperated banks. But, now there is no clear intent", said Han Zhongqi. He specially mentioned that the bank has signed a cooperative letter of intent on the establishing a fund management firm with a foreign bank.

As for the issue of listing the whole bank in the stock market after the stock reform, Han said that restructuring the ABC bank must be considered within the framework of rural financing system and is widely seen as more complex than restructuring the other state-owned commercial banks due to historical burdens.

Other state-owned commercial banks can choose to list their banks one or two years after stock reform. However, I am afraid that the time required for the ABC will be longer. The ABC has the most cumbersome distribution network among all banks in China with a long management chain. Up to now, the bank has still undertaken policy-related loans, and will take a longer time to carry out the reform plan. However, the bank's management has never stopped its mechanism and system reform".

The ABC had assets valued at 4,876.8 billion yuan (about 605 billion US dollars) by the end of 2005 with business profits amounting to 42.4 billion yuan, a year-on-year increase of 10.4 billion yuan.

By People's Daily Online