Beijing May Inject Cash Into ICBC
Industrial & Commercial Bank of China, China's largest state-owned bank, is looking to a possible government recapitalization funded from the country's foreign reserves, a senior bank executive said.
That capital infusion, along with a planned domestic bond issue, is expected to set the stage for a public share offering domestically and overseas, said ICBC Executive Vice President Zhang Furong.
Mr. Zhang said the bank plans to list its entire assets after it reforms into a stockholding company. "ICBC has yet to decide on which overseas stock market it will be listed...but there is no doubt that we will list as a whole," Mr. Zhang said.
ICBC is expected to receive government approval soon for a capital injection, and that would be a key step toward helping the bank shake off a heavy legacy of bad loans, Mr. Zhang said.
Mr. Zhang said the government may again fund the bailout through a capital injection from China's foreign-exchange reserves, but he hinted that the Ministry of Finance and the People's Bank of China are considering other forms of recapitalization.
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"I think recapitalization from China's foreign-exchange reserves will be one of the options," he said. "But whether it is the only form or whether it will be in more than one method, [the government] hasn't sent us a concrete signal yet."
In December 2003, China launched a pilot program of banking overhauls targeting Bank of China and China Construction Bank. Each received a $22.5 billion capital injection from China's foreign-exchange reserves. With more than $540 billion in hard-currency assets at the end of October, China has the second-largest foreign reserves in the world after Japan.
After the direct injection, the government allowed both banks to transfer massive amounts of nonperforming loans to state-run asset-management companies, helping to reduce their bad-loan ratios drastically.
Mr. Zhang said the size of the injection into ICBC should be larger than the $22.5 billion previously received by the two state banks, but no specific value has yet been decided. A large transfer of nonperforming loans to asset-management firms is also likely as part of ICBC's restructuring plan, he said.
Still, it is possible foreign-exchange reserves could be used to recapitalize ICBC, said Xie Ping, general manager of Central Huijin Investment, the company set up to recapitalize Bank of China and China Construction Bank.
Mr. Xie said a decision would be announced within a month. "Huijin may take a stake in the bank," he said. "There's a possibility that foreign-exchange reserves could be used to constitute all the assets of the bank or just a part of them."
Huijin now owns practically all of the registered capital of Bank of China and Construction Bank, but Mr. Xie said that stake could be reduced to around 80% after foreign strategic investors are invited to buy into the banks and the banks list on overseas exchanges, probably next year.
As the banks' biggest shareholder, Huijin, set up by the Chinese cabinet, has the right to select the six-member boards. The boards, representing Huijin, have a say on major issues such as dividend payments, but bank management is responsible for day-to-day operations.
中国政府可能向中国工商银行注资
中国最大的国有银行中国工商银行(Industrial and Commercial Bank of China)的一位高层管理人士周四表示，政府可能会动用其外汇储备向中国工商银行注资，帮助其调整资本结构。
张福荣表示，中国工商银行计划在完成股份制改造后将其全部资产上市
