China Development Bank (CDB), the country's largest
policy-oriented lender, has worked out a plan to transform itself
into a full-fledged commercial bank.
As part of the proposed plan now being reviewed by the State
Council, the CDB hopes to inject at least US$20 billion as capital
from Central Huijin Investment Corp to help the reform process,
said a source who didn't want to be named.
"But the CDB and Central Huijin are yet to finalize the terms of
their agreement because they are still in talks," the source
said.
The CDB that recently backed the Barclays Bank of England
financially in its bid for ABN Amro is a State-owned
enterprise.
The National Audit Office (NAO) has already started auditing
CDB's accounts, the source said.
Between now and next month, the NAO will determine the quality
of the bank's assets and its management capability for using State
capital.
But it's not clear how long CDB's restructuring process will
take, BOC International Securities analyst Yuan Lin said.
The CDB is 100 percent owned by the State Council, with the
Ministry of Finance acting as the representative of the
shareholders.
So it would be premature to say how the equity structure will
change, Yuan said.
According to CDB's latest figures, the bank's net assets' value
will increase from 158 billion yuan (US$21 billion) to 300 billion
yuan (US$40 billion) or more after the capital investment from
Central Huijin.
(China Daily August 6, 2007)
