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BOC Group to Complete Restructure by Year End
Bank of China Group (BOC Group) will by the year end wind up its restructuring work to fully participate in the capital market from then on, said Liu Mingkang, chairman and president of the BOC, at a signing ceremony of an overall agreement with Huaxia Bank on March 21.
The substantial plan for the restructure of the BOC Group is to combine the total assets and liabilities of the ten member banks of the Group (i.e. Bank of China Hong Kong Branch, the local branches of seven banks incorporated in Beijing-Xin Hua Bank Ltd., Jincheng Banking Corporation, Yanye Commercial Bank, Ltd., China State Bank, Ltd., China & South Sea Bank Ltd., Guangdong Provincial Bank and Branch of Zhejiang Xingye Bank, and the two banks incorporated in Hong Kong-Po Sang Bank Ltd. and Hua Chiao Commercial Bank Ltd.) to form a new large bank (New Bank of China in abbreviation) which is incorporated in Hong Kong.
Seventy percent of the interests held by the Bank of China in the other two locally incorporated banks, Nanyang Commercial Bank Ltd. ("Nanyang") and Chiyu Banking Corporation Ltd. ("Chiyu"), will be injected into the new bank, with both to become the subsidiaries of the new bank. Nanyang and Chiyu will retain their licenses, brand names and remain as separate legal persona. They will continue to maintain their close business relationship with the new parent bank.
According to the sources, although the overseas assets of the BOC merely account for 40 percent of its total assets, the profits of its overseas institutions take up 80 percent of the total volume. On March 21, the BOC Group announced in Hong Kong that by the end of 2000, the pretax income of its business in Hong Kong and Macao SAR hit HK$6.763 billion in 2000, up 17.05 percent over 1999. However, the pretax income of the second half of 2000 declined by 57.8 percent from the first half. Liu Jinbao, head of the Bank of China Group in Hong Kong and Macao denoted that this had something to do with the BOC's preparation for the restructure.
By PD Online staff member Du Minghua
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