On the last day of 2003, China’s government brought some festive cheer to two of the country’s biggest banks in the form of a $45 billion capital injection.
Could China’s largest lender wind up receiving a similar present this holiday season?
The government and Industrial & Commercial Bank of China have sent broad hints a capital injection might be in the works. No timetable for an ICBC bailout has been announced, and in theory, it could take place any time.
For accounting reasons, recapitalizing ICBC in the closing days of this year would have the most bang. Any new funds now would show up on the balance sheet of ICBC – which boasts nearly one-fifth of the nation’s total banking assets – for 2004, and put the bank in a stronger position to initiate the same kind of changes throughout next year that have won high praise for China Construction Bank and Bank of China, the two banks that benefited from the government’s $45 billion largesse last New Year’s Eve.
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