| ICBC launches joint-stock bank, readies for IPO |
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| Wednesday,November 30,2005 Posted: 15:47 BJT(0747 GMT) Chinadaily |
China's biggest state-owned bank formally launched a joint stock company on Friday in preparation for selling its shares overseas following an initial public offering by smaller lender China Construction Bank.
The Beijing-based Industrial and Commercial Bank of China announced its joint-stock company, with registered capital of 248 billion yuan ($30.6 billion) earlier this week and inaugurated it on Friday with announcements in the state media.
The company, named ICBC Stock Co., Ltd., was jointly launched by the Ministry of Finance and Central Huijin Investment Co and inherits the business and concerned assets and liabilities of the former ICBC.
Like China Construction Bank, whose shares began trading Thursday on the Hong Kong Stock Exchange, ICBC has sought outside investment and expertise as it revamps in preparation for the full opening of China's banking industry to foreign competition in 2006.
The bank said earlier that investors including Goldman Sachs Group Inc., American Express Co. and Germany's Allianz AG planned to buy a combined 10 percent stake for more than $3 billion, with the deal to be finalized after bank was restructured.
ICBC announced earlier this year that it plans to sell shares to private investors in 2006. The government injected $15 billion into the bank in April to help replenish its funds Another state-owned bank, the Bank of China, also is expected to launch a stock offering by next March or April
The potential size of ICBC's eventual IPO has not yet been announced. The Construction Bank raised $8 billion with its IPO, the world's biggest stock launch this year. The bank's shares made only a small splash on the first day of trading Thursday, however, because their price left little room for quick gains. The shares ended the day unchanged at their IPO price of HK$2.35 (30 U.S. cents).
Like the other big banks, ICBC is burdened with bad debt and is in the process of removing some 700 billion yuan ($86 billion) in nonperforming assets from its balance sheets.
In its announcement Friday, the bank vowed to ensure "that customers' interests come first, faithfully perform its duties, carefully handle business issues ... and continue to render quality financial services to its customers."
The bank reportedly is tapping high-powered veteran bankers help to improve its corporate governance and risk management.
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