RURAL ORIENTED: Agriculture Bank of China is devoted to serving the country's agriculture, rural areas and farmers. By the end of 2009, the bank's rural-related loans totaled 1.2 trillion yuan ($176 billion) (LIN YIGUANG)

Ji Guoqiang, Director of the Equity Management Department of the National Council for the Social Security Fund, said the SSF has invested 15 billion yuan ($2.2 billion) in ABC in preparation for the IPO.

The SSF, established in 2000, has investments in all of the country's largest listed state-owned commercial banks, including the Industrial and Commercial Bank of China (ICBC) and Bank of China (BOC). As of December 31, 2009, total assets under management of the SSF stood at 776.6 billion yuan ($113.7 billion). Last year, the fund weathered the global financial turbulence to achieve a rate of return at 16.1 percent of up to 84.9 billion yuan ($12.4 billion), according to the fund's website announcement.

Unlike its domestic rivals, ABC may not look overseas for strategic investors. A number of foreign banks had the rare chance to buy into the major Chinese commercial banks in 2005 and 2006 ahead of their IPOs. In return, they pledged to teach their Chinese partners how to operate profitably and risk-free, and introduce advanced management expertise. But as the financial crisis swept through the world, many of them rushed to cash out of the Chinese equities to heal financial pains at home. Goldman Sachs, for example, in May 2009 sold a 0.9-percent interest in the ICBC for around $2 billion.

This has raised suspicions over the need for an overseas strategic investor and many believe ABC may even open its door for domestic private companies. The State Council on May 13 announced a new policy that allowed private capital into the financial industry, including buying stakes at financial institutions.

Easy go

A number of domestic commercial banks are delaying their refinancing plans, which is believed to make way for ABC's IPO.

At a press conference on May 20, Guo Shuqing, Chairman of China Construction Bank (CCB) said the bank is likely to postpone its refinancing plan until the end of 2010 or early 2011.

This move was widely believed to help stabilize stock market sentiment and clear the path for ABC to go public. Share prices of CCB on the Shanghai A-share market have been on a downturn as investors grow nervous about aggressive government tightening policies.

"We will carefully time the refinancing program in line with market conditions and still hope to raise around 75 billion yuan ($11 billion)," said Guo.

In another move, the Huaxia Bank Co. Ltd. has also recently delayed the announcement date for its refinancing plan.

In fact, top managers of ABC earlier this year hinted that its IPO will not be affected by the refinancing wave of other banks at all, said a recent report by the Shanghai Business Daily.

The regulators will arrange a reasonable timetable for financing of commercial banks, and the IPO of ABC is surely the most important, said Lu Zhengwei, chief economist at the Industrial Bank Co.

ABC's Timeline

1999: The "big four" state-owned commercial banks—ICBC, CCB, BOC and ABC—spin off 1.4 trillion yuan ($200 billion) of non-performing assets to their corresponding asset management companies.

2004: ABC for the first time puts forward its shareholding reform plan.

September 2007: ABC starts a trial program in some provinces to strengthen financial services for "agriculture, rural areas and farmers."

August 2008: ABC sets up a department providing financial services for "agriculture, rural areas and farmers" as part of its shareholding reform.

October 22, 2008: The State Council approves ABC's shareholding reform plan.

November 6, 2008: Central Huijin Investment Co. Ltd. injects 130 billion yuan ($19 billion) into ABC, and ties as its largest shareholder with the Ministry of Finance.

January 9, 2009: ABC convenes its founding meeting in Beijing with a registered capital of 260 billion yuan ($38 billion).

February 2, 2009: Premier Wen Jiabao says the Central Government will inject 200 billion yuan ($29 billion) into ABC to help it prepare for the asset reorganization.

April 7, 2010: ABC kick starts the process of IPO, and 21 underwriters report their initial underwriting programs.

April 14, 2010: ABC says nine investment banks will help with its share issuance.

May 4, 2010: Reports hold that ABC files applications to list on the Shanghai Stock Exchange and Hong Kong Stock Exchange.