Founder of China's Private Bank Confident About Future

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Last updated at: (Beijing Time) Sunday, January 12, 2003

Founder of China's Private Bank Confident About Future

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Jing Shuping, the founder of the first privately-owned bank of the People's Republic of China, says that the bank will survive increasingly intense market competition, and strive to become a qualified competitor on the international financial market in three to five years.

On the eve of seventh founding anniversary of the Minsheng Banking Corporation, 85-year-old Jing said that the bank, which he founded on January 12, 1996, was striving to become a truly commercial bank by modeling itself on renowned international banks.

The total assets of the listed bank had snowballed to over 200 billion yuan (25 billion US dollars) from 1.38 billion yuan (168 million US dollars) in capital stock in 1996, said Jing, the bank's chairman.

The bank has also become the first listed private bank in China.

"The birth of Minsheng is part of the restructuring process of China's banking system," said Jing.

Minsheng emerged as an experiment by China to reform the country's decades-old banking system, under which all major commercial banks were state-owned and it was difficult for private firms to get loans from the banks.

The private economy has become an increasingly important part of China's fast-growing economy, and its role has been recognized by the Chinese government in recent years.

"The facts of the experiment showed the decision of the central government (to give green light to the establishment of Minsheng) was both correct and successful," Jing said.

Jing, who graduated from the Department of Journalism of St. John's University in Shanghai in 1939, said market demand and better corporate governance contributed to the bank's success.

"China needs a group of truly commercial banks, and it is necessary and feasible for non-state economic sectors to invest in China's financial and banking sector."

"The listing of shareholding commercial banks on the stock market facilitates sustained and healthy development of banks, an effective way to link up the banking firms and the capital market," said Jing.

Jing, who began to run business before New China was founded in1949, said he welcomed international competition on the Chinese market.

"By choosing to take the road of a Socialist market economy, China has chosen competition, and it is no good to fear about competition."

"That is the attitude Minsheng has adopted during the past year since China joined the World Trade Organization, and Minsheng has so far maintained its fast growth momentum in various businesses."

The board of directors of Minsheng recently adopted its international business strategy, involving expanding its business scope to foreign exchange and using overseas capital at the appropriate time by getting listed on overseas stock markets.

Minsheng would choose a foreign strategic business partner and investor in a bid to uplift its comprehensive competitiveness, Jing said.

Overseas business partners could help the bank improve management and put it on a par with foreign counterparts.

He said risk control was a top priority for a developing bank.

By the end of the third quarter of 2002, Minsheng had managed to bring its share of bad assets down to 2.36 percent of its total assets, one of the best in China.

"Hopefully, the rate may decrease to one percent or even lower."

"Minsheng has also decided to gradually shift its business priority to individual service in a bid to lift its retailing business to about 30 percent of its overall business from the current 10 percent, compared to 40 percent to 50 percent for overseas banks."

Jing believed the next two decades would have great opportunities for development in the Chinese banking sector as the16th National Congress of the Chinese Communist Party convened last year had decided to accelerate the country's modernization drive in the first two decades of this century.

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