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ABC may extend lock-up time for shares past rivals' 3 years

The chairman of the Agricultural Bank of China said the lender may extend an investor lock-up period beyond the two-to-three year timetable of its other big four state-owned rivals as some of their foreign strategic partners have divested.

The most important lesson ABC has learned from the listing of the other big-four banks is the need for an "appropriate" equity participation cap and an investor lock-up period, it said yesterday, quoting an interview with Xiang Junbo, chairman of the Beijing-based bank.

"Based on the experiences of peers, we plan to establish a long-term friendly strategic relationship with foreign investors via an appropriate control over the lock-up period and ownership percentage," said Xiang. "We may even make this lock-up period longer. The appropriate ownership percentage by strategic investors is very important. These two points are very important and valuable to us."

But he said the bank has still not found a strategic partner.

The bank got a US$19-billion government cash injection in November 2008 and restructured into a shareholding firm in January this year to pave the way to a possible listing.

The other three big-four banks - the Industrial and Commercial Bank of China, the Bank of China and China Construction Bank - have used the three-step method of restructuring, wooing strategic investors and going public to transform themselves into modern commercial banks.

About one-third of ABC's assets, or about 1 trillion yuan (US$146 billion), are agri-related. Xiang said he plans for the agro-banking business to rise to 50 percent, but he didn't give a time frame.

The central government is encouraging banks to develop business in rural areas.

The Ministry of Finance has launched favorable policies in six pilot provinces and regions to stimulate lending. If a bank grants 15 percent more in agri-related loans over the previous year, the ministry will give subsidies equivalent to 2 percent of the amount which exceeds the previous loan, it said.


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