Banking News
- Govt. still mulls AgBank bailout plan
Date: 3-Jul-2007 Sources: (Shenzhen Daily)
THE government is still working on a proposal to restructure Agricultural Bank of China (AgBank), the weakest of the four biggest State-owned banks, a banking regulator said yesterday.
Reform procedures for Beijing-based AgBank will follow steps taken by Industrial & Commercial Bank China Ltd. (ICBC) and the two other biggest lenders, Jiang Dingzhi, a vice chairman of China Banking Regulatory Commission, said in a forum in Shanghai.
The government spent US$60 billion bailing out ICBC, Bank of China Ltd. and China Construction Bank Corp., which later attracted foreign strategic investors and eventually sold shares in initial public offerings.
A bailout of AgBank may cost China as much as US$140 billion to meet the central bank's 8 percent minimum capital adequacy requirement, Standard & Poor's estimates. The State Council, or Cabinet, decided to keep the bank whole rather than break it up, citing a need to preserve financial services for farmers who use its 31,000 branches.
A task force composed of members from the People's Bank of China, the banking regulator and government departments are scrambling to come up with a proposal that will reconcile AgBank's task of serving unprofitable rural areas with its commercial business.
Xiang Junbo, a vice governor of People's Bank of China, the central bank, will take over as president of Agricultural Bank of China, the Caijing magazine reported Wednesday, citing unnamed sources.
Xiang will replace the current president of the bank, Yang Minsheng, who is likely to be come vice chairman of the China Insurance Regulatory Commission.
The appointment could signal that the government wants to speed up the restructuring of the bank, the magazine said.
The report did not say when Xiang was expected to become president of the bank.
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