AGRICULTURAL Bank of China became the last state-owned lender to be revamped when it received approval yesterday to be restructured into a share holding bank.
The bank got the approval from the State Council, said the central government on its Website yesterday, without giving more details on the restructuring plan.
Beijing-based ABC will focus on rural financial services and is expected to boost credit to China's rural areas with improved services, the statement said. The bank will also develop its outlets and business in rural areas. It declined to give more details yesterday, noting that it will reveal more information today.
The bank may receive a bailout of US$19 billion from Central Huijin Investment Co, a unit of China's US$200-billion sovereign wealth fund. Central Huijin and the Ministry of Finance will each take a 50 percent stake in the bank, Bloomberg News reported yesterday, citing unnamed sources.
The government will remove bad debt from ABC's balance sheet to reduce its non-performing loan ratio to about 4 percent, the report said. The bank's sour loan ratio sits at 21 percent, according to its latest annual report.
The bank is the last of the country's big four state-owned lenders to be restructured while Industrial and Commercial Bank of China, Bank of China and China Construction Bank have all gone public after receiving a combined US$60 billion government bailout to shed bad loan burden.
The three largest banks have raised US$53 billion selling shares in the past two years. China has spent about US$500 billion bailing out its biggest lenders over the past decade.
The market has been waiting a long time for the bank's restructuring plan which in the end decided to keep the bank whole rather than break it up.
Xiang Junbo, former head of the Shanghai headquarters of the People's Bank of China and former deputy governor, was appointed last year as the president of ABC to speed up the bank's restructuring.
The bank, set up in 1979 to serve the country's 800 million farmers, operates 31,000 outlets nationwide.