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| Agricultural Bank May Turn Local: Report |
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China's State Council is considering a plan by the central bank to localize the Agricultural Bank of China as one way to cut the lender's bad loans and restructure, the China Business Post reported. The plan, submitted by People's Bank of China Governor Zhou Xiaochuan on May 9, seeks to close the lender's headquarters in Beijing and allow provincial branches to set up local headquarters and oversee local operations, the Beijing-based newspaper cited an unidentified person as saying. Under the plan, local governments will share the costs of restructuring the lender with the central government. The government may have to spend US$60 billion to US$70 billion on the bank, the paper said. But ABC, the smallest of the nation's four biggest state-owned lenders, may oppose the central-bank-favored plan over concerns about possible layoffs, the newspaper said. The lender said earlier this year it submitted a restructuring plan to the Cabinet seeking government help in disposing bad loans and achieving a group listing in the future. Its larger rivals, Industrial & Commercial Bank of China, Bank of China and China Construction Bank, have received a combined US$60 billion from the government since 2003 and sold stakes to foreign strategic investors. ABC's profit last year slumped 48 percent to 1.04 billion yuan (US$130 million) as interest income fell and provisions against bad loans, which took up 26.17 percent of total lending by the end of last year, rose, the bank said in its annual report posted on May 18 in the official Financial News. ABC's bad-loan ratio and its workforce approaching half a million employees have kept overseas investors at bay. Its has 28,234 outlets nationwide. (Shanghai Daily May 22, 2006) |
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