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Bank of China

Bank of China is one of the big four state-owned commercial banks of the People's Republic of China – the other three are Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China. Bank of China was founded in 1912 to replace the Government Bank of Imperial China, and is the oldest bank in China. From its establishment until 1942, it issued banknotes on behalf of the Government of the Republic of China along with the "Big Four" banks of the period: the Central Bank of China, Farmers Bank of China and Bank of Communications. Although it initially functioned as the Chinese central bank, in 1928 the Central Bank of China replaced it in that role. Subsequently, BOC became a purely commercial bank.

Glencore takes inflation in stride

PUBLISHED : Wednesday, 15 June, 2011, 12:00am
UPDATED : Wednesday, 15 June, 2011, 12:00am
 

Commodities giant Glencore has attempted to shrug off fears of a slowdown in China and a commodities crash.

As the London- and Hong Kong-listed mining company unveiled its first quarterly results as a public company, Glencore chief executive Ivan Glasenberg insisted that soaring mainland inflation would cause just a temporary pause in the bank lending and infrastructure investment that has powered China's massive resources consumption.

'The next three to six months could be difficult [in China],' Glasenberg said. 'As they get some inflation they do pull back on things like bank lending, but these are short-term efforts we see from time to time.'

Consumer prices on the mainland rose 5.5 per cent year on year in May. Yesterday, the People's Bank of China increased the reserve ratio - the percentage of deposits banks must store in the central bank - by 50 basis points to 21.5 per cent for major lenders.

Glencore, which raised US$10 billion in its initial public offering on May 25, said first-quarter net income rose to US$1.09 billion from US$886 million in the same period last year.

Glasenberg dismissed media reports that his company was preparing to buy Kazakh mining company ENRC. However, his firm has agreed to buy Hong Kong-listed CST Mining's Mina Justa copper deposit in Peru for US$475 million.

Glencore's shares stayed flat at 514p in London as investors balanced Glasenberg's rosy outlook with bleak commodities data. The shares were suspended in Hong Kong ahead of the results and resume trading today.

US crude oil for July delivery, at US$99.49 a barrel, is trading just above its lowest level in a month. China's copper imports dropped 3 per cent, month on month, in May.

'Commodities demand will slow,' said Ross Strachan of London consultancy Capital Economics. 'It's not just the Chinese story. We will see further economic slowdowns in the US, Europe and Japan.'

Glencore's short life as a public company has been packed with scandal and intrigue.

Its listing prospectus revealed that one current and one former employee of its subsidiary Glencore Grain Rotterdam have been charged with corruption for allegedly obtaining secret information about European Union food subsidies.

A group of NGOs have accused the company of illegally evading tax in Zambia, basing their claims on a report by accountant Grant Thornton for the African country's government. Glasenberg called the report flawed and said a tax audit by the Zambian government would vindicate Glencore.

Simon Murray, Glencore's 71-year-old chairman, has also raised eyebrows with his role as a director of Toronto-listed mainland timber firm Sino-Forest. US short seller Muddy Waters claimed on June 2 that Sino-Forest had overstated land holdings and sales in Yunnan. Sino-Forest denies the claims but its shares have plunged 73 per cent since June 1.

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