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Mixed-ownership reform of Bank of Communications approved

Updated: Jun 17,2015 8:55 AM     Xinhua

BEIJING — Bank of Communications (BoCom), China’s fifth largest lender, became the country’s first state-owned bank to carry out mixed ownership reform on June 16.

The People’s Bank of China, the central bank, has issued a notice allowing BoCom to go ahead with reform plans, which have been approved by the State Council, China’s cabinet, BoCom said in a statement filed to the Shanghai Stock Exchange.

The reforms include optimizing its ownership structure through the introduction of private shareholders, improving its internal administration system to strengthen risk control and employee stock ownership plan, BoCom said.

China has been pushing forward mixed-ownership reform for large state-owned banks, believing the presence of private capital can generate more vitality.

BoCom’s total assets reached 6.28 trillion yuan ($1.03 trillion) in 2014. Experts have voiced doubts whether a small private capital can have real influence on the management of such a big bank.

However, investors have wagered on the bonus of mixed-ownership reform for the bank. On June 1, June 4 and June 8, the bank jumped by the daily limit of 10 percent on the stock market, a rare occurrence for any banking juggernaut in China.

It defied the market’s volatility again on June 16, up 1.94 percent to end at 8.92 yuan per share.

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