Post saving bank gets green light in China
(Bloomberg)
Updated: 2006-06-27 08:57
China's banking regulator said Monday that it has approved the
setting up of the China Post Savings Bank, creating the nation's fifth-biggest
lender by deposits from a reorganization of the post office.
The
government will split all financial businesses from the State Post Bureau with
the new lender to be established within six months, the China Banking Regulatory
Commission said in a statement on its Web site.
China is separating
commercial businesses from government agencies in order to curtail corruption
and improve efficiency. Post Savings Bank, with access to 36,000 postal outlets
nationwide, will be a new rival for Agricultural Bank of China, the weakest by
asset quality of the nation's four biggest state- owned banks.
"The birth
of the new bank may complicate the role of Agricultural Bank, which also has
most of its outlets in rural areas," said Qiu Zhicheng, a banking analyst at
Haitong Securities in Shanghai. "China Post has never done lending business
before."
The government is encouraging banks to write down bad loans and
increase capital by selling shares to prepare them for increased foreign
competition.
China is committed to opening the banking industry by the
end of this year, allowing HSBC Holdings, Citigroup and other foreign lenders to
compete for China's US$1.84 trillion of household savings.
The banking
regulator said last July that it would set up a post savings bank with 1.23
trillion yuan, or $153 billion, of deposits, which is 10 percent of China's
household savings. About two-thirds of the postal bureau's outlets are in rural
areas.
China Post, which started taking deposits in 1986, has more than
352 billion yuan of assets, 260 million account holders and 70 million debit
card holders, according to its Web site. Its deposits are held by the central
bank, the People's Bank of China.
SHANGHAI China's banking regulator
said Monday that it has approved the setting up of the China Post Savings Bank,
creating the nation's fifth-biggest lender by deposits from a reorganization of
the post office.
The government will split all financial businesses from
the State Post Bureau with the new lender to be established within six months,
the China Banking Regulatory Commission said in a statement on its Web
site.
China is separating commercial businesses from government agencies
in order to curtail corruption and improve efficiency. Post Savings Bank, with
access to 36,000 postal outlets nationwide, will be a new rival for Agricultural
Bank of China, the weakest by asset quality of the nation's four biggest state-
owned banks.
"The birth of the new bank may complicate the role of
Agricultural Bank, which also has most of its outlets in rural areas," said Qiu
Zhicheng, a banking analyst at Haitong Securities in Shanghai. "China Post has
never done lending business before."
The government is encouraging banks
to write down bad loans and increase capital by selling shares to prepare them
for increased foreign competition.
China is committed to opening the
banking industry by the end of this year, allowing HSBC Holdings, Citigroup and
other foreign lenders to compete for China's US$1.84 trillion of household
savings.
The banking regulator said last July that it would set up a post
savings bank with 1.23 trillion yuan, or US$153 billion, of deposits, which is
10 percent of China's household savings. About two-thirds of the postal bureau's
outlets are in rural areas.
China Post, which started taking deposits in
1986, has more than 352 billion yuan of assets, 260 million account holders and
70 million debit card holders, according to its Web site. Its deposits are held
by the central bank, the People's Bank of China.
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