Thu, Dec 28, 2006 - Page 11 News List

Chinese bank will get cash injection for overseas listing

AFP , BEIJING

The Agricultural Bank of China (中國農銀), the country's fourth largest lender, may get a US$100 billion cash injection next year in preparation for an overseas listing, state media reported yesterday.

Liu Mingkang (劉明康), chairman of the China Banking Regulatory Commission, the industry watchdog, told reporters at a finance forum that there would be "good news" next year in terms of restructuring the bank, the China Daily reported.

The bank is the last of the country's four major banks to undergo a joint stock reform that may include, apart from the capital injection from the government, spinning off losses and setting up a joint stock company, the report said.

A final decision on the bank's reform plan will not be confirmed until the Central Financial Work Conference expected to take place before next February's Chinese New Year holiday, it said.

The Agricultural Bank of China is widely seen as the most troubled of China's four state-owned commercial banks, groaning under a mountain of bad loans.

Last year, 26.2 percent of the bank's US$356 billion in loans were non-performing, the report said.

An official with the Central Huijin Investment Co, a central government investment arm, was quoted by the newspaper as saying that the bank's massive bad loans might cause the costs of reform to soar as high as US$100 billion.

The amount is significantly larger than the cash injections received by the three other top state-owned commercial lenders before listing overseas.

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