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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4857)	5/23/2005 3:06:53 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Beijing rules out capital injection for bank in 2005 Lee Yuk-kei May 24, 2005 Agricultural Bank of China, the mainland's fourth-largest state-owned lender, will not receive a cash injection from the central government this year, the deputy central bank governor said. ``This year, it's not possible to inject capital,'' People's Bank of China deputy governor Wu Xiaoling said at an insurance conference Monday. The deputy governor's remark suggests there is no definite timetable for a bailout of the debt-burdened bank, which has the highest bad-loan ratio among the Big Four state-owned lenders, at 27 percent as of May 1 last year compared with just 3.46 percent at China Construction Bank. It has been apparent for some time that Agricultural Bank would be the last big bank to undergo a state-run overhaul. Bank of China and China Construction Bank received capital injections totaling US$45 billion (HK$351 billion) in December 2003, helping to recapitalize their balance sheets, write off bad debt and facilitate crucial reforms. And in April this year, Beijing said it will inject US$15 billion of capital into the nation's biggest commercial bank, Industrial and Commercial Bank of China (ICBC). The central government is trying to bolster the capital base of the big banks even as its seeks to improve their internal management in order to prepare them for initial public offerings. It is all part of an effort to make sure mainland banks can compete effectively when the industry is opened up to foreign competition late next year under the terms of the country's accession to the World Trade Organization. Both Bank of China and China Construction Bank plan to sell shares this year. ICBC, the mainland's biggest lender, plans an IPO next year. However, Liu Mingkang, chairman of the China Banking Regulatory Commission, poured cold water over prospects for BoC and Construction Bank last week, saying the two may find it difficult to complete IPOs this year. yk.lee@singtaonewscorp.com thestandard.com.hk