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City gets rural commercial bank
By Feng Jie (China Daily)
Updated: 2005-10-20 08:53
The Beijing Rural Commercial Bank was unveiled yesterday, a further step by
the authorities to try to turn a loss-making sector into profitable financial
institutions which can support the nation's rural development.
The bank has been restructured from a rural credit co-operative and has 5.07
billion yuan (US$626 million) in registered capital.
It is the second provincial-level rural commercial bank, following its peer
in Shanghai.
Banking authorities are escalating reforms aimed at turning the nation's more
than 30,000 rural credit co-operatives, which are mostly unprofitable, into
well-managed financial institutions.
The co-operatives are being restructured into commercial banks, co-operative
banks or larger credit co-operatives.
A joint-stock reform has substantially diversified the stock structure of the
bank, providing a solid basis for commercial operations that place a top
priority on profit.
It has 387 corporate shareholders, who together hold a 56.2 per cent share of
the bank. Individual shareholders, many of them farmers, own the rest.
Currently only one of the board of directors is a farmer, but that number may
increase in the coming days, bank officials indicated without elaborating.
The bank is expected to continue to focus on rural areas, farmers and
agriculture, which the Chinese Government is trying to support, although the
bank is not legally restricted to agricultural loans or rural areas of the city.
"We are going to maintain our original market and customer base," said Jin
Weihong, president of the bank. "Supporting rural areas, farmers and agriculture
does not mean we cannot make a profit."
The bank is the largest of the rural commercial banks -- which include
several provincial and city level banks -- and other regional banks in terms of
its capital amount.
Reform measures, including 2 billion yuan (US$246 million) in central bank
bills to help write off bad loans as well as efforts to improve management, have
already yielded results.
The bank's operating profit came in at 974 million yuan (US$120 million) for
the first nine months of this year, up 56 per cent from the same period last
year.
"All major business indicators are expected to outperform their previous
levels, and this year may well be the best year in our history," said Jin
Weihong, referring to the Beijing rural credit co-operative's 54 years of
history.
Nearly 70 per cent of the bank's outstanding loans are agriculture-related.
That level is unlikely to see any drastic change in the near future, although
the bank will try to target urban citizens and small and medium-sized companies
in the city, the official said.
Total assets stood at 123.5 billion yuan (US$15.2 billion) at the end of
September, while loans added up to 5.7 billion yuan (US$6.7 billion), up 13 per
cent from a year earlier, the bank said.
It has almost 700 outlets scattered around the suburbs of Beijing.
(China Daily 10/20/2005 page10)
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