Agricultural Bank cleared to restructure | South China Morning Post
  • Sun
  • Mar 1, 2015
  • Updated: 8:49pm

Agricultural Bank cleared to restructure

PUBLISHED : Wednesday, 22 October, 2008, 12:00am
UPDATED : Wednesday, 22 October, 2008, 12:00am
 

The State Council yesterday approved a long-awaited proposal to restructure Agricultural Bank of China into a shareholder-based company, paving the way for the rural lender's listing.

The go-ahead came after Beijing vowed to improve financial services in rural areas and increase investments to bolster economic growth, which cooled to 9 per cent in the third quarter, the slowest pace in five years.

Officials at a cabinet meeting chaired by Premier Wen Jiabao yesterday passed Agricultural Bank's restructuring plans. It is the last of the four state banks to transform itself into a shareholder-based lender.

'The bank has made important contributions in serving the agriculture sector, the rural areas and the farmers,' said a government statement. 'It should focus on serving the rural economy, stabilise and develop its rural network and business, set up county divisions and improve credit support to farmers.'

Agricultural Bank, saddled with bad loans of more than 800 billion yuan (HK$907.76 billion), will seek a stock market listing after the restructuring. The statement did not provide details of the restructuring and the bank declined to comment, saying it would make an announcement today.

Bloomberg cited sources as saying Central Huijin Investment, a unit of the mainland's US$200 billion sovereign wealth fund, might inject US$19 billion in cash for a 50 per cent stake in the lender.

At the end of last year, Agricultural Bank had 5.28 trillion yuan in deposits and 3.48 trillion yuan in loans.

In the first half of this year, the bank posted a 39 per cent rise in operating profit to 54.3 billion yuan.

Its non-performing-loan ratio fell to 22.41 per cent at the end of June.

The State Council yesterday also approved some road, airport and power station construction projects, including the acceleration of the North-South Water Diversion.

'The projects can help boost investment and stimulate domestic demand,' said Lin Chaohui, an analyst with Guotai Junan Securities.

'It's clear the central government is actively coping with the upcoming downward cycle of the economy,' the analyst said.

State backing

The mainland's sovereign wealth fund will reportedly take a stake of: 50%

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or