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BOC has yet to choose bourse
By Wang Weiping (Xinhua)
Updated: 2004-04-15 10:25
A Bank of China (BOC) spokesman said in Beijing Wednesday the BOC was working to either recover or write off problem assets in preparation for a listing scheduled for 2005, but had yet to choose a stock bourse.
Wang Zhaowen, the spokesman, refuted reports in some media about the bank's initial public offering (IPO) in China. "The listing place will not be solely decided by the BOC itself, but should be approved (by the regulator) and take into account market conditions," he told the press.
"So the bank can either be listed domestically or in other places."
The bank's non-performing asset (NPA) ratio declined 1.44 percentage points in the past three months to 14.84 percent by the end of March in compliance with the internationally accepted five-category loan classification system.
The accumulated NPAs, however, still stood at as much as 342.4 billion yuan (US$41.3 billion) by last month-end, compared with the bank's assets totaling more than 4 trillion yuan (US$482 billion).
China's "Big Four" state-owned banks have been beleaguered by a pile of bad debts due to excess loans to money-losing state-owned enterprises over the past decades, analysts acknowledged.
The banks are now striving to shake off the burdens in pursuit of cleaner balance sheets, a prerequisite for an IPO.
Central authorities are hoping a stock market listing will make domestic banks richer and more sophisticated in management ahead of unrestricted opening of the country's financial sector to foreign banks by the end of 2006 under a WTO commitment. The State Council has already injected a combined US$45 billion in foreign exchange reserve to the BOC and China Construction Bank to replenish their cash capital.
Wang Zhaowen disclosed the BOC was talking with potential "strategic investors" from both at home and abroad, who would hopefully bring the bank advanced management, and streamlining operation.
Also released Wednesday were the BOC's business profits, which rose a year-on-year 28 percent to 17.4 billion yuan (US$2.1 billion) in the first quarter of the year, fulfilling 29 percent of the bank's annual target.
This was largely on the back of the robust business reported by the bank's domestic branches, though the BOC boasts the most extensive network among the "Big Four" in the overseas market.
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