Top Biz News

ICBC set to revamp corporate structure

By Zhang Lu (China Daily)
Updated: 2006-06-01 08:57

The Industrial and Commercial Bank of China (ICBC), the country's biggest lender, will restructure its head office this month to improve corporate governance and operating efficiency.

The revamp of the bank's corporate structure will mainly involve three sectors  corporate business, financial affairs and capital transaction, the ICBC said in a statement yesterday.

It will add 10 new departments, including credit approval, risk management, asset and liability management, and will cut seven other divisions.

The restructuring is in line with demands from the bank's clients, as well as its management and business process, the bank said.

"The corporate restructuring shows that the largest State commercial bank is transforming itself towards a modernized bank with international standards," said Zhao Xijun, deputy director of the Finance and Securities Institute at Renmin University of China.

He said that although the ICBC started its shareholding reform later than the other two State commercial banks, China Construction Bank and Bank of China, it has been doing so at a relatively rapid pace.

The bank emerged as a joint-stock company last October and brought in overseas strategic investors Goldman Sachs, Allianz Group and American Express earlier this year.

"The corporate restructuring is a deepening of its shares reform, paving the way for its initial public offering this year," Zhao said.

"The year 2006 is the listing year for the ICBC," the bank said. "This restructuring is to clarify functions of its business departments, to enhance corporate governance and operating efficiency."

The ICBC's restructuring plan stresses client-oriented marketing, risk management and comprehensive business development.

The bank said that corporate restructuring at its head office will be completed in June. Its branches nationwide will be restructured accordingly, based on their own situations and local market demands.

However, Zhao from Renmin University said that the bank's most important and more difficult tasks will be how to integrate its resources, further expand its business and provide necessary services to enhance its competitiveness after the restructure.
The ICBC said that in addition to corporate restructuring, the bank will rebuild its business process to better serve its clients and increase benefits.

Chinese banks have been urged to improve their competitiveness to deal with challenges from overseas lenders when the country opens the sector at the end of this year.

The banks have sought public listings to improve finances.

It has been reported the ICBC may raise US$10 billion to US$12 billion in a Hong Kong sale as early as September.

The lender has hired China International Capital Corp, Credit Suisse Group, Deutsche Bank AG, ICEA Securities Ltd and Merrill Lynch & Co to manage the sale.

Bank of China raised US$9.7 billion in Hong Kong last month and plans to issue around 20 billion yuan (US$2.5 billion) A-shares this month.