Industrial Bank, previously known as Fujian Industrial Bank Co. Ltd., said in its 2002 financial report that its overseas capital infusion program had been pushed forward steadily, without revealing the potential foreign partner's names.

Meanwhile, a Singapore-based spokesperson of United Overseas Bank Ltd., who declined to be identified, said the Singaporean bank is in the Chinese lender's potential partner list.

"We are in talks with several Chinese banks but they are still in the preliminary stages," said the UOB spokesman.

The current Chinese banking regulations permit domestic commercial banks to sell a 25 percent stake to overseas investors, a gradual move that honors the nation's 2001 entry into the World Trade Organization.

U.S.-based Citibank bought 5 percent of Shanghai Pudong Development Bank last week for 600 million yuan (US$72.3 million), the latest in a wave of overseas banks which have purchased shares in Chinese lenders.

"The Chinese government has been encouraging foreign investment in domestic banks. Foreign entry need not to be the 'death toll' for Chinese lenders given the sector's enormous growth potential," said Fred Hu, managing director of Goldman Sachs (Asia).

Additionally, Industrial Bank said it had passed half of the one-year probation period required by the China Securities Regulatory Commission for listing on the domestic bourse.

Unlike the nation's big-four state-owned commercial banks which has been deeply involved in a huge non-performing loan mire due to years of policy lendings to ailing state-owned enterprises in the 1990s, Industrial Bank's asset quality is among the best on China's mainland.

Its NPL ratio stood at 3.2 percent last year, down one percentage point from a year earlier. Its assets totalled 170 billion yuan as of December 31, 2002, a rise of 36 percent from the previous year.

Since founding in 1988 Industrial Bank has established 250 outlets on the Chinese mainland, most of which are located in the nation's coastal provinces.

(Shanghai Daily January 6, 2003)