Credit Suisse boss hails China's finance reform
( 2003-10-20 09:12) (China Daily)
China's rapid emergence on the world economic stage is resulting in a quickening of domestic reform and is pushing change into new sectors of the economy, said John Mack, chief executive of Credit Suisse First Boston.
As a result, China will benefit from a broadening of reform as, for example, its insurance sector is reorganized as leading companies prepare for listings abroad, he said.
Mack said his company is currently working with China Life, the nation's largest life insurer, to prepare for the Chinese company's flotation, "hopefully before year-end."
China Life has previously submitted applications to securities regulators in both the United States and the Hong Kong Special Administrative Region.
China's largest property insurer - the People's Insurance Co of China Property and Casualty Co Ltd - has reportedly scheduled a flotation for next month in Hong Kong.
Mack added that rapid change in China is also spurring innovation among banks. As an example of this, he highlighted an advisory agreement that Credit Suisse First Boston signed with the Industrial and Commercial Bank of China around three weeks ago to advise the bank on the domestic securitization of non-performing loans (NPLs).
Regulators have still to approve the agreement.
The proposed transaction would be a landmark event because it would enable the bank to remove part of its bad-loan risk from its balance sheet through securitization. That would be a first for a Chinese bank, Mack said.
"We know that the NPL issue is a key one for China. Finding innovative ways to resolve it is the type of thing investment banks will need to do to prosper in China," he said in Beijing on Thursday. "China's companies and its government are seeking tomorrow's solutions and are not afraid to break new ground."
Under the proposed agreement, Credit Suisse First Boston would purchase non-performing assets worth a book value of US$300 million from the bank's Ningbo branch in East China's Zhejiang Province. Credit Suisse First Boston executives declined to disclose the price their company would be paying.
A few earlier non-performing loan projects involving foreign investors progressed slowly, which was widely attributed to prudence on the part of regulators.
However, Wei Christianson, head of China investment banking at Credit Suisse First Boston, said: "Our feeling is, from last year till now ... there has been considerable change in the policy."
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