Bank
of China Group, the country's largest foreign exchange bank,
said on Friday it earned 57 billion yuan (US$6.9 billion) in
operating profits last year before setting aside provisions for bad
assets.
The profit represents an increase of 4.8 billion yuan (US$573.4
million) or 9.11 percent compared with a year ago.
By the end of last year, the bank's non-performing loans (NPLs),
by the international standard of five category classification,
stood at 15.92 percent, a drop of 6.45 percentage points compared
with a year ago.
The greater profits, which can help boost the bank's capital
base, are another piece of good news for the bank, which plans to
go public before the end of 2005.
At the end of last year, the bank got a US$22.5 billion
injection from the state to increase its capital adequacy.
The bank, together with China
Construction Bank, has been chosen by the state to pilot the
joint-stock restructuring.
"China's four largest state-owned commercial banks, also
including the Industrial and Commercial
Bank of China and the Agricultural Bank of China, will have to
sharpen their competitive edge before foreign banks can enter China
without restrictions at the end of 2005," said Niu Li, a senior
economist with the State
Information Center.
They will also have to lower the rate of NPLs, get rid of
historical financial burdens and raise their capital adequacy to
international standards, Niu said.
The Bank of China is now the only state bank with a capital
adequate ratio of more than 8 percent, according to bank spokesman
Wang Zhaowen.
"The asset restructuring is just part of the bank's overall
restructuring plan, which is being implemented and is listed as the
most important work for the bank in 2004," he said. "Restructuring
is more important than going public."
The plan covers restructuring in business, organization
structure, management procedure, IT, human resources, and even
corporate culture.
"Our focus on business restructuring is to make our service more
market-oriented and customer-centered," he said.
Such restructuring not only includes big moves such as
classifying the business into three departments -the retail,
corporate and financial institutions business departments, but also
extends to details such as the redesigning of bank deposit receipts
to make them more customer-friendly and renovating outlets.
To simplify management procedures, the Bank of China will also
centralize its international settlement business.
Meanwhile, more efforts will be poured into the restructuring of
its computer centers.
(China Daily January 17, 2004)
?