As the mainland sector's restructuring gathers pace, Liu Jinbao's listing experience becomes invaluable In his new role with the Bank of China in Beijing, the departing vice-chairman of the BOC Hong Kong (Holdings) could help accelerate the pace of restructuring in the mainland's banking system. Meanwhile, his expected replacement at BOC HK confronted a struggling Hong Kong economy and a difficult consolidation of bank operations, analysts said. Liu Jinbao is expected to become Bank of China vice-chairman. Succeeding him at BOC HK is He Guangbei, managing director and executive vice-president. A BOC HK spokesman would not confirm the management changes, which were reported yesterday in the South China Morning Post. Mr Liu's future could become clearer on Thursday when the Bank of China board meets in Beijing. A spokesman for the Bank of China's head office said Mr Liu was in Beijing to attend the meeting. Asked if Mr Liu would face a job change, the spokesman said: 'We have not received any notices so far.' However, sources said Mr Liu had been asked to fly to Beijing over the weekend. He brought a wealth of experience from the listing of the Hong Kong operations a year ago that would be invaluable as China grappled with similar changes in its own banking system, analysts said. 'Bank of China HK was a substandard organisation with substandard people,' said a Hong Kong-based banker. 'Managing that process was very difficult. That's very relevant to China.' The heads of all four state banks said they expected to list within the next two years. Construction Bank of China and Bank of China are the lead candidates, which makes Mr Liu's role pivotal in the restructuring of the banking industry in China. Formed in October 2001 from the merger of 10 of the 12 members of the Bank of China Group, BOC HK has been undergoing a period of turmoil as it integrates its Hong Kong operations into a single entity. Both the management and bank branches had to be consolidated into a single working institution. Refashioning the bank's operations will continue to pose headaches for Mr He as he assumes his new duties. Problems include heavy reliance on corporate property loans, which account for 24 per cent of total loans, and on residential mortgages, which account for 33 per cent of loans. BOC HK might have to increase its provisions to cover the decline in value of loans affected by falling property prices, analysts said. Plans to spend $3.5 billion over three years on technology upgrades will also drain capital in the short term. Consolidation will result in the closure of 30 branches and the laying off or transfer of employees. Whether Mr He is up to the task is unclear. 'He's a safe pair of hands,' one banker noted. 'Bank of China HK is a massive oil tanker, and a safe pair of hands is what they need.' Some analysts said the bank should move more aggressively to tackle these issues. 'We take the view some things should be changed drastically, such as more aggressive write-offs of non-performing loans,' HSBC Securities analyst Alan Chua said. In a recent report, Mr Chua pointed out that BOC HK churned out half the operating revenue per employee that Hang Seng Bank generated. BOC HK reports $1.35 million per employee, against $2.07 million at Hang Seng Bank. Similarly, net profit per employee of Hang Seng Bank is nearly three times that of BOC HK.