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China to build its fifth largest bank

www.chinanews.cn 2005-01-26 15:42:06

Chinanews, Jan. 25 - Last Friday, the China Banking Regulatory Commission
(CBRC) ended its 2005 work conference. At the conference, Liu Mingkang,
chairman of CBRC, pointed out that the commission would continue reforms
of the Postal Savings and Remittance Bureau, which would include building
a postal savings bank and legally incorporating it in the banking
supervisory system. These words painted a bright prospect for the postal
savings bank.
It was also mentioned in the following conference briefing that the CBRC
must "firmly grasp" reforms of the postal savings system this year. This
was the first time the government took a clear and definite stand on
whether to turn the system into a bank after seven to eight years of
heated discussion.
The bureau has become a great burden for the country's implementation of
financial policies. Since it was established in 1986, the bureau has only
absorbed deposits and never offered loans. The deposits were all
transferred to the Central Bank, which paid a higher interest rate than
postal savings. Therefore, the bureau easily made a profit from the
interest rate spread.
In the face of market pressure, postal savings funds have been actively
invested in the interbank bond market in 2004. The size of the account
approached 170 billion yuan at the end of 2004, almost four times the
2003 figure. Among more than one thousand Chinese institutions that
entered this market, the bureau ranked 28th.
Meanwhile, the snowball of the Postal Savings and Remittance Bureau
rolled on and on. Statistics from the bureau indicated the postal savings
balance had grown to 1.07 trillion yuan by the end of 2004, accounting
for nearly one tenth of the national deposits.

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8610-68327649

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