Bank's IPO plan in final deliberation

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Last updated at: (Beijing Time) Friday, October 24, 2003

Bank's IPO plan in final deliberation

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Two of the Big-Four banks will be allowed to go public domestically and overseas within the coming two years, a move expected to deepen the reforms of the debt-ridden Chinese banking system, sina.com.cn reported today.

The plan has been under final deliberation, and hasn't officially been released to public yet, said an industry analyst.

A large quantity of bad debts will be transformed to government-holding asset management companies, with a small part covered by government funds, the analyst said.

At least two commercial banks have employed the global renowned auditing enterprises to stride their first step toward initial public offerings (IPOs), the analyst added.

The PricewaterhouseCoopers (PwC) will continue to act as the auditor of the Bank of China, dubbed as the one with the best financial status among the big-four banks, including the Industrial and Commercial Bank of China (ICBC), Bank of China (BOC), China Construction Bank (CCB) and Agricultural Bank of China (ABC).

The ICBC, with its total loan amounts topping the list, employed Ernst & Young to make auditing on its branches.

The ICBC plans to cut its bad loan radio from the existing 22 percent to 10 percent by 2006. "ICBC is likely to go pubic by 2006, possibly on both the domestic and overseas market simultaneously, with the overseas markets including Hong Kong, New York and Singapore," said a manager with the bank.

The spokesman with BOC refused to reveal their listing plan, despite the rumor that it will go public as early as 2005.

The China Construction Bank, following BOC and ICBC in listing procedures, announced Tuesday that its bad loan ratio down four percentage points to 11.92 percent by the end of September.

The Agricultural Bank of China is predicted to be the last one among the big-four banks to go public, with 30 percent of bad loan ratio at the end of last year.

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