Bank of China to be listed in 2005The Bank of China (BOC), one of China's four major state commercial banks, is to reform into a joint-stock company and list its shares on the stock market in 2005.
Listing of the bank as a whole would be more transparent than partial listing and was also in accordance with international practice, Xiao Gang, BOC president, told Xinhua.
As listing required sound corporate performance, the BOC was inno hurry to list before completing internal regrouping and reform,said Xiao.
The bank would use part of a recent injection of 22.5 billion US dollars from the government's foreign reserves to buy international bonds with relatively higher credit ratings, to gain reasonable returns to ensure this portion of funds was secure, said Xiao.
The money would be used neither to write off bad debts nor to exchange into Renminbi, he said.
The bank's bad debts would be gradually canceled with equity surpluses before the capital injection, worth over 200 billion yuan (24.2 billion US dollars), Xiao said.
China earlier this month announced a 45-billion-US-dollar plan to turn the debt-laden Bank of China and China Construction Bank into profitable, freestanding corporations as the country preparesto open its financial sector to foreign competition.
For years, money in China's state banks was used to prop up failing state companies, leaving institutions like the Bank of China with a mountain of bad loans. China's commitment to the World Trade Organization to open its banking sector to foreign competition by 2006 has put new urgency into bank reform.
The State Council has selected the Bank of China and the China Construction Bank for pilot reform as joint-stock banks.
After the reform, the two banks would become modern banking companies, with sufficient capital, strict internal controls, safeoperations, good service and good economic returns.
In 2003, the BOC reported a profit of over 57 billion yuan (6.89 billion US dollars), a rise of about 4.76 billion yuan (576 million US dollars) or 9.11 percent over the previous year.
Last year, the asset quality of the BOC greatly improved and the ratio of non-performing loans fell by 6.45 percentage points over the end of 2002, to 15.92 percent.
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