The China Investment Corporation (CIC) has confirmed that it
will soon inject capital into the Agricultural Bank of China (ABC)
and China Development Bank (CDB) to finance their
restructuring.
Lou Jiwei, CIC chairman, denied reports that the $200-billion
sovereign fund would purchase a stake in the Australia-based ANB
banking group.
Meanwhile, central bank chief Zhou Xiaochuan said yesterday China will soon
reveal plans to restructure the Agricultural Bank of China.
Reform plans have been circulated, and the authorities are
actively preparing to move ahead with the proposed changes, he told
the 2007 China Financial Forum.
Lou said at the same gathering that the capital injection will
be conducted through Central Huijin, an investment arm that the CIC
acquired from the central bank before the fund was formally
established in late September.
"According to the plan approved by the State Council, Central
Huijin will take part in the reform and restructuring of the China
Development Bank and the Agricultural Bank of China in the near
future," Lou said. No exact timetables for the reform were
given.
China has used part of its colossal foreign exchange reserves to
shore up major commercial banks before they brought in strategic
investors and listed on stock exchanges.
The ABC, which had a non-performing loan ratio of 23.55 percent
at the end of last year, much higher than the other three major
banks, is the only one of the "big four" commercial banks that has
not undergone share-holding restructuring.
The State also wants the CDB to become more commercialized. To
achieve this end, the authorities plan to inject capital and
restructure the bank.
Lou said that after the reform, the CIC will not have a hand in
the daily management of the ABC, but will express its voice through
a board member when it comes to major decision-making.
Lou also said that the CIC had not taken a stake in Australia
and New Zealand Banking Group Ltd. There had been reports that the
CIC might have bought a stake of less than 5 percent in the
Australian lender.
(China Daily December 26, 2007)
