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The Bank of China and the China Construction Bank, two of the country's largest four state-owned commercial banks, are planning for public listing at overseas stock exchanges.
The China Construction Bank hopes to be listed at the Hong Kong and New York bourses within 2004, garnering up to US$10 billion and becoming the largest listed company in the world for the year, the China News Service reported on Thursday.
In the meantime, the Bank of China planned to get listed in 2005, its governor Xiao Gang told the Shanghai Securities Post.
At the end of 2003, the Chinese central government injected US$45 billion of foreign reserve into the two banks, US$22.5 billion apiece, to activate the business performance of the two state banks.
Fund inflow from the state coffers will enable the capital adequacy ratio of the two banks to rise to accord with the 8 percent standard, set by the International Clearing Bank. And the NPL (non-performing loan) ratio will drop to below 5 percent, economists said.
Xiao Gang said that the Bank of China will go public listed as a whole, which will guarantee business transparency, and at the same time, decrease the relative procedure and bookwork that may erupt from spin-off.
Xiao announced that the US$22.5 billion fund his bank received last December won't be changed into RMB and won't be used for cancelling bad debts. The bank will use parts of the fund to purchase some bonds that have higher value in the world market and get reasonable market repayments while ensuring the fund's safety.
The China Construction Bank indicated that its listed subsidiary would leave most of its bad debt and US$22.5 billion capital injection in the hands of parent company. A bank official said that the funds generated from listing will mainly be used to replenish the bank's capital reserve and speed up its business scope.
Sources said that the construction bank will invite the China International Finance, Morgan Stanley and Citigroup Global Markets Limited as its stock listing sponsors, while HSBC may act as its financial consultant.
(China Daily January 30, 2004)
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