China to bail out 2 more State banks
(Xinhua)
Updated: 2004-12-04 08:58

He made the remark Thursday at a forum on the capital market and corporate governance, two days after Liu Mingkang, chairman ofthe China Banking Regulatory Commission (CBRC), said the banks' reform is crucial to overhaul of the banking sector.

But Lou did not give any estimates as to when the money would be granted and how much.

If the government does hand over the funds, this will be the second bank bailout since the end of 2003, when China granted 45-billion-dollars to the Construction Bank and Bank of China, two other "big four" banks.

The capital injection, Lou acknowledged, no matter in what form,will help spin off non-performing loans (NPLs) from the banks and build a new corporate governance structure.

"The Ministry of Finance is mulling this move and we hope international players will consider strategic cooperation with banks like ICBC," he said.

The government will refrain from over-regulation in pushing thebanks to build up new modern corporate governance, he noted. This is because the regulator's main responsibility lies in affirming the genuineness of financial information published by companies.

ICBC and ABC have long been regarded as the weaker of China's big four state banks and are saddled with billions of dollars of non-performing loans.

According to relevant government figures, at the end of September, commercial banks had 1.7 trillion yuan (205 billion dollars) of NPLs, increasing from 1.66 trillion yuan at the end ofJune.

As part of the reform to the banking system competitive before the sector is opened in early 2007, the central government hopes to make the big four commercial banks public.

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