China may inject $40b into Agricultural Bank
Updated: 2007-08-06 08:48
Central Huijin, China's state-owned investment company, plans to inject US$40 billion into the Agricultural Bank of China (ABC), the only one of the big four state-owned commercial banks that remains unlisted, the Economic Observer newspaper reported.
The injection would mark a major step in ABC's shareholding reform. It would raise ABC's capital adequacy ratio to eight percent, the required ratio for commercial banks in China.
The shareholding reform of the ABC, which began in February this year, is the last and the toughest piece of the move to overhaul the country's state-owned banks started in 2003.
The other three banks, the Bank of China, the Industrial and Commercial Bank of China, and the Construction Bank of China has completed reform and gone public by October last year.
"The reform of the ABC is particularly difficult because the bank's historical burden is relatively heavier," said Jiang Dingzhi, vice chairman of China Banking Regulatory Commission (CBRC).
The 2006 annual report of the bank recorded a capital of 84 billion yuan (US$11.1 billion) and a 23.43 percent non-performing loan ratio.
The key of the ABC's reform lies in how to combine the government-designated function to support agricultural development and the application of commercial rules, said the newspaper.
The government is auditing the bank's financial record, which will provide important reference for deciding how much in total would be injected into the bank, said the CBRC vice chairman.
|
||
|
|