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Monday, 1 October, 2001, 12:11 GMT 13:11 UK
Bank giant boosts China WTO drive
Road in Hong Kong's Waichai district
Hong Kong shake-up boosts China's WTO drive
One of China's big four banks has streamlined its Hong Kong affiliates to create the territory's second biggest bank, outflanked only by HSBC.

Hong Kong chief executive Tung Chee Hwa took part in the National Day ceremony to celebrate the formation of Bank of China (HK).

Bank of China said its restructuring pulls together 12 banks in Hong Kong to create a bank serving 40% of Hong Kong's population in the retail banking and 70% of companies.

Analysts said the move heralded a strengthening China's banking system, through the adoption of internationally recognised standards and structures ahead of its entry into the World Trade Organisation (WTO).

"The new company is set to... establish good corporate governance and a better customer service system, improve risk control measures and accurate information disclosure," Bank of China said.

The bank will set up an asset management company to deal with non-performing loans, seek to improve asset quality, create a strategic business unit and divide operations into front, middle and back offices, chief executive Liu Jinbao said.

China's central bank, the People's Bank of China (PBC), approved the move, which is "also necessary in face of China's imminent entry into the World Trade Organisation", a Bank of China spokesman added.

Foreign competition

China is opening up its financial services sector to foreign institutions.

Chinese banking officials see foreign banks taking up to 15% of the market for foreign currency deposits, 10% of deposits in Chinese yuan and up to 30% of foreign exchange loans within five years of China entering the WTO, the official China Daily newspaper said.

At the end of 2000, Bank of China had total assets of 3,000bn yuan ($383bn) and assets in Hong Kong of HK$820bn ($10bn).

The bank, one of the first Chinese institutions to list on the Hong Kong Stock Exchange, had 369 branches in Hong Kong, more than 2.9 million retail clients and 250,000 corporate clients.

See also:

07 Mar 01 | Business
Hong Kong faces budget crunch
24 May 01 | Business
Hong Kong woos business
18 Jun 01 | Business
China targets currency smugglers
18 Jul 01 | Business
Hong Kong sets price for 3G auction
07 Aug 01 | Business
China stocks reel as rulers disagree
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