China's top banking regulator said on Tuesday that the application of the Industrial and Commercial Bank of China (ICBC), the country's biggest lender, has been approved.

The plan to go public by ICBC "has been officially approved", Liu Mingkang, chairman of the China Banking Regulatory Commission, told a mid-year work conference of the commission.

Last month, ICBC announced a net profit of 33.7 billion yuan (4.2 billion U.S. dollars) for last year, an increase of 12 percent from the previous year.

The bank plans to submit its IPO application to the Hong Kong Exchanges and Clearing Limited (HKEx) on Tuesday for listing on the Hong Kong stock market on Oct. 27 with an offering price of 2.76 HK dollars, Shanghai-based China Business News reported on Tuesday.

The bank is expected to be listed on both the mainland and Hong Kong stock markets, the paper said,

China hopes its "big four" state banks - the ICBC, Bank of China, China Construction Bank and Agricultural Bank of China -, once plagued by a mountain of bad debts, to strengthen corporate governance and streamline operations with the help of foreign investors and public listings.

The moves are part of the efforts made by the Chinese Government, the major stockholder of the "big four", to overhaul Chinese banks before the full opening of China's financial market to foreign competition by the end of this year under the commitment China made upon its WTO entry.

"Foreign banks in China would enjoy national treatment and will be able to compete with Chinese banks on full scale by Dec. 11 of this year under the commitment," said Liu.

He said the commission is revising, together with other government departments, the regulation of foreign banks so that China will be able to carry out all of its obligations in the banking sector.

The Bank of China, the second biggest commercial bank on the Chinese mainland, has been listed on the Hong Kong and Shanghai stock markets in the last two months following the listing of China Construction Bank in Hong Kong last October.

Shares of the Bank of China made a strong debut in Shanghai on July 5 as the new number one blue chip on China's stock markets, replacing petrochemical giant Sinopec.

BOC's initial public offering was valued at a hefty 20 billion yuan (2.5 billion U.S. dollars), the biggest-ever in China's market, and its equities, totaling 253.8 billion shares, dwarfed the 86.7 billion shares of the former front-runner Sinopec Corp.

Prior to that, the bank raised the equivalent of 11.2 billion U.S. dollars in its initial public offering in Hong Kong on June 1, the world's fourth largest.

The bank's net profits soared 31 percent last year over 2004 to 27.5 billion yuan.

The Central Huijin Company Ltd., a government investment arm, held the lion's share of ICBC and Bank of China. It owns 67.5 percent shares of the Bank of China before its trading debut.

The shares sale marked another milestone in China's efforts to overhaul its banking sector that has long been a weak link in the country's booming economy as a result of decades of state-directed lending.

China set up four asset management companies in 1999 to dispose of 1.4 trillion yuan-worth of non-performing loans transferred from the "big four".

In the following years, the government in turn poured a combined 60 billion U.S. dollars into ICBC, CCB and BOC in bailout packages to shore up their balance sheets. The three have either become shareholding companies or gone public after inviting foreign investors.

Source: Xinhua