China accelerates shareholding reform of Agricultural Bank

Beijing(China)—Chinese central bank governor Zhou Xiaochuan said Tuesday that the government is speeding up the share holding reform of the Agricultural Bank of China (ABC), following the successful listing of the other three big state-owned commercial banks.
Zhou, governor of the People's Bank of China (PBOC), made the statement in a report on the reform of state-owned commercial banks to legislators at the National People's Congress (NPC) Standing Committee. Zhou said the ABC would continue to act as a major financial services provider for farmers and agriculture and in rural areas. The government had set out a plan for the reform of state-owned commercial banks, including procedures such as capital injections, dealing with non-performing loans, establishing shareholding companies, introducing strategic investors and seeking opportunities for listing. But each bank had to stipulate its own detailed reform implementation plan based on its circumstances.
Zhou gave no further details or a timetable for the ABC's shareholding reform on Tuesday. A PBOC report said the ABC's shareholding reform plan, which would take into consideration the requirements of building a socialist new countryside and rural financial institutional reform, was being researched. With its balance sheet at the end of 2005 showing a bad loan ratio at 26.31 percent and non-performing loans topping 739 billion yuan, the ABC had much work to do to transform itself from a state-owned bank to a joint stock company listed on the stock market. The debt-laden lender has been the subject of a heated debate over whether it should be split into a group of provincial-level banks to better facilitate local agricultural funding.
Zhou on Tuesday claimed the shareholding reform of the other three big four state-owned banks had made significant achievements and they had successfully listed on Hong Kong or mainland stock markets. After absorbing 22.5 billion U.S dollars each, the Construction Bank of China was listed in Hong Kong in October last year and the Bank of China was listed in Hong Kong in June this year and on the mainland (H share and A share) in July 2006.
After taking 15 billion U.S. dollars from the central government, the Industrial and Commercial Bank of China (ICBC), the largest commercial bank in China, started trading in Hong Kong and Shanghai on Oct. 27.

—Daily Mail, People’s Daily news exchange item