CDB takes step towards commercial status

Policy lender China Development Bank officially relaunched as a joint-stock entity, a step towards becoming a full commercial bank, the South China Morning Post reported. The new entity, China Development Bank Corp, is jointly owned by the Ministry of Finance and Central Huijin Investment, a unit of the sovereign wealth fund China Investment Corp (CIC), and has US$43.8 billion in registered capital. CDB has not yet been granted the right to accept household deposits, so it will have to continue to rely on interbank bond issuances for funding – a limitation seen as presenting challenges for the bank’s financing. CDB’s bonds will no longer carry a sovereign rating, a change that will increase its fund-raising costs after 2010, a professor at the Central Finance and Economics University said. At the end of 2007, CDB had total assets of US$42.2 billion. It has engaged in overseas acquisitions, buying a 3.1% stake in UK bank Barclays last year.