Stock pilot program to start in a week

By Zhang Ran (China Daily)
Updated: 2007-08-24 10:21

An Industrial and Commercial Bank of China booth at an exhibition in Zhengzhou, capital of Central China's Henan Province. [newsphoto]

Mainland residents will be able to apply for accounts to buy Hong Kong stocks in Tianjin from next week, Bank of China (BOC), the first mainland lender to offer the service, said yesterday.

"We expect to start accepting applications from customers in Tianjin from next week and to gradually extend (the service) to 40 major cities," Xiao Gang, chairman of BOC, said in Beijing yesterday at a briefing to report the bank's first-half financial results.

The bank's branch in the northern port city of Tianjin is to be the initial gateway for the program, which is expected to channel off the country's excess liquidity and give mainland residents more investment choices.

BOC will publish application details next week, according to the chairman. The bank posted a stronger-than-expected 52 percent net profit increase in the first half, driven by a surge in net interest and fee-based income.

China's booming stock market has helped boost banks' fee and commission income. BOC's net fee and commission income rocketed 72 percent from the same period last year.

The Industrial and Commercial Bank of China (ICBC), which also released its half-yearly results yesterday, posted an annual increase of 89 percent on net fee and commission income.

ICBC, the world's largest bank by market value, posted a net profit of 41.4 billion yuan in the first half, up 61.4 percent on the previous year.

Both banks said the subprime credit crisis had made little impact on their balance sheets.

ICBC held $1.23 billion in mortgage-backed securities as at June 30, accounting for 4.32 percent of its foreign exchange investment portfolio.

"It had incurred no loss on the portfolio, which accounts for 0.0012 percent of the group's total assets," said Yang Kaisheng, vice-chairman and president of ICBC.

BOC's investment in mortgage-backed securities was $8.965 billion on June 30, accounting for 3.51 percent of its total investment in securities.

(For more biz stories, please visit Industry Updates)

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