Banking's long road
(China Daily)
Updated: 2006-10-24 09:39 China's efforts to beef up its State-owned lenders
before the full opening of the banking sector later this year is culminating
with a massive listing scheme by the Industrial and Commercial Bank of China
(ICBC), the biggest of the five State banks.
Three of four other State lenders have already gone public, also installing
overseas strategic investors with the aim of introducing advanced management
know-how.
For years, these banks were regarded as being technically insolvent due to
huge bad assets.
Thanks to bold, commendable measures including enormous State financial input
for capital replenishment and write-offs of bad debt, as well as the listing
schemes, the banks are establishing an image as commercially viable
institutions.
Shares of these banks are enthusiastically snapped up, and have performed
well. ICBC, for example, is set to raise US$21.9 billion from the market, making
its initial public offering the largest the world has ever seen; its stocks are
anticipated to be investors' darlings at the second market.
Financial engineering for the restructuring has proven
to be successful. Consequently, central Huijin, which represents State interests
in the restructured State banks, has witnessed the growth in value of its stakes
in the listed banks.
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