Minsheng, whose shares were listed on the Shanghai Stock Exchange in 2000, has relatively little bad debt compared with other Chinese lenders, especially the big state-run banks. It reported non-performing loans (NPLs) at 1.31% of total lending by the end of 2004, the lowest in the industry – the average NPL ratio for 12 other Chinese shareholding banks is 5.01%. But the bank has the same problems with corporate governance that plague almost every Chinese industry. Last year, it admitted that some of its officials had faked a shareholder meeting for convenience’s sake. It has since added three independent directors to oversee issues such as executive salaries.
The bank recently received approval for an IPO in Hong Kong that is expected to raise up to $1bn. It has 17 main branches and reported assets totalled Rmb445.4bn ($53.8m) at end 2004.
Like many of its peers, Minsheng has sought foreign investment to help fill out its capital base. The International Finance Corporation (IFC), the private sector investment arm of the World Bank, took a 1.08% stake in 2004 and Asia Financial Holdings, a unit of Singapore state investment fund Temasek Holdings Pte, took a 4.55% stake in January.
But the bank appears to be ambivalent about taking any major foreign strategic partners. “Our aim is to be a multinational but Chinese-funded financial institution. We do not want to tie up with any potential competitor,” says Minsheng president Dong Wenbiao. Mr Dong, a former teacher at Henan Financial Institute, served as manager of the Zhengzhou branch of the China Construction Bank, one of the four state-owned banks, leaving in 1996 to become deputy president at Minsheng. Since becoming president in 2000, he has guided the bank’s transformation into the first privately invested financial institution in the domestic share market.
Minsheng’s chairman, Jing Shuping, is well known in China. He is a former vice-chairman of the national committee of the Chinese People’s Political Consultative Conference (CPPCC), a top-level government advisory group. He was also Minsheng’s first president.
