The Agricultural Bank of China (ABC), the last of the nation's four
leading commercial banks to go public, will have its capital
increased by Central Huijin Investment Co. in the first half of
this year as it moves towards a public listing.
Bank sources said Wednesday that Central Huijin will determine
how much money to pump into the bank following an audit by experts
from the National Audit Office. The audit result will probably be
released in the first half of the year.
Founded in 2003, Central Huijin Investment is an investment
company owned by the People's Bank of China, the central bank,
which holds shares in the four leading commercial banks.
In 2005, Central Huijin injected US$60 billion into three of the
"big four", namely the Industrial and Commercial Bank of China,
China Construction Bank and Bank of China. The money came from the
nation's huge foreign exchange reserves.
The bank sources said ABC's scheme for the joint-stock reform
and IPO (initial public offering) has been hammered out. But the
result of a pre-IPO audit is needed to make decisions on a capital
injection and the selection of strategic investors. The audit will
provide reliable financial data on which Central Huijin's cash
injection can be based, the sources added.
Central Huijin will make a bigger investment in ABC than in the
other three big commercial banks, an official with the company
revealed on condition of anonymity.
Preparing ABC for listing -- improving the capital adequacy
ratio and the balance sheet, and writing off non-performing loans
-- will require an injection of about 900 billion yuan (US$115
billion).
The company official estimated that Central Huijin would
contribute about US$25 to 30 billion.
(Xinhua News Agency February 1, 2007)
