Central bank proposes breaking up Agricultural Bank
(AP)
Updated: 2006-05-22 13:44
China's central bank has recommended breaking up the huge but financially
troubled Agricultural Bank of China, the fourth biggest bank, a newspaper
reported Monday.
A breakup was the "preferred proposal" among several submitted to the Cabinet
by central bank Gov. Zhou Xiaochuan, the China Business Post said, citing
unidentified "authoritative channels."
The Agricultural Bank has lagged behind China's other major state-owned
commercial banks, which have been recapitalized by the government and found
foreign strategic investors.
The central bank would turn the Agricultural Bank into a group of
provincial-level banks, which could let Beijing force provinces to share in the
cost of shoring up its balance sheet, the Business Post said.
The Agricultural Bank's press office didn't immediately respond to requests
for information.
The bank last week reported that its profits for 2005 were 1 billion yuan
(US$125 million). But the bank says nonperforming loans account for 26 percent
of its total.
According to the newspaper, other proposals on the list resemble the
treatment given to China's other big banks, which are preparing to raise money
with stock offerings in Hong Kong.
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