The Beijing-based bank has undertaken a series of measures in risk control, asset recovery and NPL reduction in recent years as part of moves to set the basis for an initial public offering, BOC said in a statement yesterday.

Aiming to float its mainland operations on the domestic stock market by 2005, BOC has embarked on a restructuring strategy, with NPL reduction being one of the most arduous tasks.

NPL ratio reduction in the first four months was 1.25 percentage points larger than in the same period last year, the bank said.

Outstanding NPLs were cut by 12 billion yuan (US$1.45 billion) in the first four months.

The NPL ratio was measured by the internationally accepted loan-classification standard and covered both domestic and overseas operations, it said.

In the first four months this year, as part of moves to improve BOC's credit structure, the majority of new lending was placed in sectors and companies with low risk, high efficiency and positive prospects, the bank said.

The bank has boosted its credit to individuals, shareholding companies, multinationals and financial institutions while constantly increasing its credit to important sectors, such as power, petroleum and telecommunications.

The bank's NPL ratio fell by 5.14 percentage points to 22.37 per cent last year.

The mainland's banking authorities aim to cut the average NPL ratio of the four State-owned commercial banks to 15 per cent by 2005.

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