The reform plan of China Development Bank (CDB) has been
ratified, turning the policy bank to a commercial lender, sources
with the country's central bank said.
According to the plan, approved by the State Council in the
middle of this month, CDB will go through a series of reforms
including restructuring, company management framework adjustment
and going public when the time is right.
The plan will soon be released to the public, the China
Securities Journal cited the source as saying on Monday.
However, no information is available yet about when the conversion
will happen.
The move ended a four-year discussion on CDB's
commercialization, prolonged by considerations of the bank's
special status and low capital adequacy ratio.
CDB is required to set up a stock company within six months
after the plan is fixed. Chen Yuan, governor of the lender will
probably be the board chairman, Monday's Shanghai Securities
News quoted an unidentified industry expert as saying.
After the commercialization, the lender is to expand wholesale
banking businesses and market investments besides continuing to
support the country's key sectors and priority projects, the source
said.
Market analysts said middle- and long-term wholesale loans will
continue to be CDB's main business. The bank may not rush into
competition with other commercial banks in retailing sector soon
because of limited branches and proficiency in doing wholesale
banking business.
CDB now owns 32 branches and four representative offices
nationwide.
In December, Central Huijin Investment Co., an investment arm of
the Chinese government, injected 20 billion U.S. dollars into CDB,
sharply raising CDB's capital adequacy and improving its
risk-prevention capability.
CDB is one of the country's three policy banks, the other two
being the Eximbank and the Agricultural Development Bank. Its main
businesses include funding the development of infrastructure, basic
industries, pillar industries as well as top-priority State
projects.
(Xinhua News Agency February 18, 2008)
