Bank of
Beijing said it is in talks with overseas financial institutions that may result in at least two foreign banks taking a combined 24.98 percent stake in the 16th biggest of the mainland's city commercial lenders.
``We may finish the negotiations and sign deals as early as March,'' bank chairman Yan Bianzhu said over the weekend at a ceremony marking the official change in the bank's name from
Beijing City Commercial Bank.
``After that, we will prepare for an initial share offer, and I think we will go public within two years,'' he said. ``I am sure we will expand our bank outside of
Beijing in the next few years.''
He said after a briefing that the bank will probably go public by selling shares at home, not abroad.
China's banking regulator last year allowed the nation's city commercial banks to expand outside their home bases for the first time, making them more attractive to overseas banks. Household savings at Chinese banks reached a record US$1.5 trillion (HK$11.7 trillion) at the end of November.
``City commercial banks, especially those in big cities, are attractive to foreign investors because they are smaller and cost less to invest in,'' Guotai Junan Securities analyst Wu Yonggang said in Shanghai.
Bank of
Beijing said pre-tax profit last year rose to 2.39 billion yuan (HK$2.24 billion) from 1.85 billion yuan in 2003. Assets totaled 209 billion yuan at the end of last year, outstanding loans stood at 109.6 billion yuan and deposits were 189 billion yuan.
The bank's bad-loan ratio at the end of last year was 4.8 percent.
The capital-adequacy ratio was 8.36percent, Yan said.
Foreign banks are seeking partners in China as the nation opens up its financial services sector under provisions of its World Trade Organization entry in December 2001.
HSBC Holdings, Europe's biggest bank by market value, agreed last August to acquire 19.9 percent of Shanghai's Bank of Communications, the country's fifth-biggest lender.
Commonwealth Bank of Australia, the nation's second-biggest lender, agreed to buy 11 percent of China's eighth-biggest city commercial bank in September, and then entered talks to buy a stake in a second Chinese city lender in November.
Commonwealth Bank last year won regulatory approval for its purchase of a stake in
Jinan City Commercial Bank and has an option to buy a total of a fifth of that lender.
Hangzhou Bank in the eastern province of Zhejiang said Commonwealth is also negotiating to buy a stake in it.
Bank of Nova Scotia won approval last September from regulators to raise its stake in
Xian City Commercial Bank to as much as 12.5 percent.
