They were transformed from state specialized banks

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Unformatted text preview: nant state-owned commercial banks are: Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), Bank of China (BOC) and China Construction Bank (CCB). They were transformed from state specialized banks into commercial entities during the 1994 banking reform which aimed to create a more unified and efficient banking system. Under the new system, each SOCB is held accountable for Figure�2�Assets�Distribution�of�Banking�Institutions,�20051 27 % SOCBs 52% 5% JSCBs CCBs Others 16 % Source: China Banking Regulatory Commission, 2005 1 “others” include policy banks, rural commercial banks, foreign banks, UCCs, RCCs, finance companies, trust and investment companies, financial leasing companies and postal savings. Non-Performing Loan of China’s Banking System 131 its profitability. They have direct reporting responsibility to the State Council. The history and current status of each of the SOCBs are briefly described below: Industrial and Commercial Bank of China (ICBC) ICBC was established in 1984 to manage short-term industrial and commercial credit, including the granting of loans for working capital. ICBC is approved to accept deposits and remittances, make loans, and conduct foreign exchange transactions such as trade finance and guarantees. After 22 years of development, ICBC has ranked first in China’s banking system for many indexes such as total assets, total capital, core capital and operating profit, etc. Moreover, ICBC is China’s biggest lender and has the second largest face value of NPLs. In October, 2005, ICBC was officially transformed from a state-owned commercial bank into a share holding company and renamed as Industrial and Commercial Bank of China Limited. At the end of June 2005, the general assets of ICBC amounted to RMB 6.14 trillion, the balance of deposits was RMB 5.3858 trillion, and loans balance exceeded RMB 3.1122 trillion. In 2004, ICBC domestic and overseas branches produced a profit of RMB 74.6 billion2. China Construction Bank (CCB) CCB is derived from the People’s Construction Bank of China which was founded in 1954 as a wholly state-owned bank under the direction of the Ministry of Finance of the PRC to administer and disburse government funds for construction and infrastructure related projects under the state economic plan. In 1979, the People’s Construction Bank of China became a financial institution under the direction of the State Council and gradually assumed more commercial banking functions. The People’s Construction Bank of China gradually became a full service commercial bank following the establishment of China Development Bank in 1994 to assume its policy lending functions. In 1996, the People’s Construction Bank of China changed its name to China Construction Bank. CCB was responsible for administering state investment and providing loans for capital construction. CCB also conducts foreign exchange transactions, markets overseas investments, and issues bonds. China Construction Bank Corporation...
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This document was uploaded on 03/12/2014.

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