New president says bank's priority is to win investors' trust Industrial and Commercial Bank of China (ICBC) will sell new shares to foreign investors before going public 'at an appropriate time' in the coming year, its new president Yang Kaisheng said yesterday. The arrangement will link the capital position of China's largest commercial lender more directly to the valuations achieved in stake sales to foreign investors after it received a much smaller than expected US$15 billion state capital injection in April. 'Our initial plan is to issue new shares to foreign strategic investors,' Mr Yang said after a ceremony to inaugurate a new joint stock company that has inherited ICBC's assets, business and staff and will serve as its listing vehicle. As a result, the Ministry of Finance and China SAFE Investments, which each owns 50 per cent of the bank, will see their stakes diluted by equal amounts. It is understood ICBC may sign a definitive agreement to sell a 10 per cent stake to a consortium consisting of a Goldman Sachs private equity fund, Allianz Group and American Express for more than US$3 billion next month after an August memorandum of understanding. 'We may sign agreements with more than one strategic investor,' Mr Yang said. After the US$15 billion state cash injection, the removal of 705 billion yuan of non-performing loans and a 35 billion yuan subordinated bond issue, ICBC raised its capital adequacy ratio to 10.26 per cent by the end of last month. Its non-performing loans fell to 4.6 per cent of lending by the end of the third quarter, while about 83 billion yuan of loan loss reserves were set aside, representing a loan loss coverage ratio of 57.44 per cent. Meanwhile, operating profit rose 11.2 per cent year on year to 64.4 billion yuan. Mr Yang said: 'My biggest priority in the next year is to convince investors that ICBC is a trustworthy firm that is worth investing in.' Specific tasks included improving the return on equity and reducing non-performing loans, he said. Although ICBC has yet to finalise its listing venue, Mr Yang rebutted a comment by United States Securities and Exchange Commission chairman Christopher Cox that major Chinese banks cannot currently meet US listing requirements. 'I think any regulator is keen to develop the local market by encouraging more companies to list there [the US],' Mr Yang said. 'However, it is counter-productive to their goal to accuse companies which choose not to list on their stock exchanges of not being able to meet their listing requirements.'