The Agricultural Bank of China received a US$19 billion bailout from Central Huijin yesterday as the bank kicked off its financial restructure.
Central Huijin, an arm of China's sovereign wealth fund, and the Ministry of Finance will each hold a 50 percent stake in the Beijing-based bank after the bailout, the bank said.
"The Central Huijin capital injection is a key step in ABC's reform. The bailout will effectively help boost the bank's capital, improve the balance sheet and strengthen profitability," the bank said.
"Central Huijin can also revitalize the bank with its experiences in commercial banks' corporate government and operation," it said.
The bank would improve its profitability and competitiveness and stabilize and develop its business in rural areas, it said. It would also roll out more innovative products to serve the rural area including small-sum credit and bank cards made for farmers.
Pan Gongsheng, vice president of the bank, said it would complete the technical preparation for the initial public offering in the second half of next year.
The bank is the last of the big-four state-owned banks to start a revamp. The Industrial and Commercial Bank of China, the Bank of China and China Construction Bank have gone public after receiving a combined US$60 billion government bailout and shed their bad loan burden.
(Shanghai Daily November 7, 2008)
