BOC highlights risk controls despite frauds
(AP)
Updated: 2006-06-23 06:53
The Bank of China will "certainly" uncover more fraud cases in the near
future, the lender's chairman said Thursday, stressing his bank's efforts to
improve risk controls.
The bank, which earlier this month raised US$11.2 billion in Hong Kong in the
world's biggest initial public offering in six years, is upbeat about its
ability to meet its targets and control risks despite credit tightening measures
imposed by the central bank, top executives said in a Web cast.
"I am confident that we can meet the operating profit target for 2006," said
Li Lihui, the bank's president. "And I hope we can do even better in 2007."
Bank of China is also planning to raise another 20 billion yuan (US$2.5
billion; euro2 billion) in a share offering in Shanghai that will be mainland
China's biggest IPO ever.
The bank's shares will debut on the Shanghai Stock Exchange on July 5, said
the bank's chairman, Xiao Gang.
Bank of China's Hong Kong-traded shares were unchanged Thursday at 3.40 Hong
Kong dollars (43 U.S. cents; 34 euro cents).
A series of fraud cases discovered in Bank of China branches has raised
worries about the bank's risk management practices.
The bank will "certainly" have more fraud cases in the near future, Xiao
said. But he emphasized Bank of China's efforts to improve its risk controls.
The bank held a special meeting in May to focus on bill fraud risks after a case
involving acceptance bills was discovered earlier this year, he said.
Analysts worry that a flood of cash into the banking system from huge IPOs by
China's largest lenders may add to excessive loan growth.
China Construction Bank Corp. raised US$9.7 billion in October and the
Industrial & Commercial Bank of China is set to beat Bank of China's listing
with one of its own in Hong Kong later this year.
New yuan-denominated loans reached half of the central bank's full-year
target of 2.5 trillion yuan (US$312 billion; euro247 billion) in the first
quarter of this year. China has raised local interest rates and banks' reserve
requirements to discourage new loan growth.
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