Biggest state bank may go public
(Xinhua)
Updated: 2006-06-13 14:38 Chinese banks have piled up a mountain of problem debts over the past decades
due to reckless, usually government-ordered, lending to state-owned enterprises,
sapping their competitiveness, analysts acknowledge.
However they have
been moving to shed off hefty bad debts, push forward joint-stock reform, invite
foreign investors, try to secure stock market listings and take other measures
to help upgrade business prior to fully opening the country's financial markets
to foreign rivals -- under a commitment to the World Trade Organization -- by
the end of this year.
ICBC was transformed into a joint-stock company in
October 2005, assuming all business and relevant assets and debts of the former
solely state-owned bank, with the Ministry of Finance and Central Huijin
Investment Co. Ltd., a central government investment arm, each holding a 50
percent stake.
Months later, a foreign trio of Goldman Sachs, American
Express and Allianz Group paid a combined 3.78 billion U.S. dollars for a 8.89
percent stake in the ICBC, the biggest-ever amount of foreign investment in
China's banking industry.
The bank now boasts 18,000 business outlets in
China's mainland, serving more than 4 million enterprises and more than 100
million individual clients.
Its capital adequacy ratio (CAR), the measure
of its available capital in proportion to its outstanding loans, rose to 10.26
percent by the end of last year, already above the 8 percent requirement by the
international standard.
The bank's non-performing loan ratio fell to
4.43 percent by 2005, coming closer to the 1-2 percent level reported by
sophisticated foreign banks.
China Construction Bank took the lead in
the "big four" state banks to list its shares in Hong Kong last October.
Agricultural Bank of China also said it would seek to list shares as a
whole.
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