BEIJING, May 31 (Xinhuanet by business writer Wang Weiping) -- A Bank of China (BOC) spokesman confirmed Tuesday that the leading state bank is seeking to offer shares in 2005.

    "We are making active preparations for the market listing, but the share-offering depends on an opportunity and window to the market. We are doing our best (to list this year)," said Wang Zhaowen, the BOC spokesman, at a press conference.

    His optimism could be built on the bank's strong performance in 2004. The bank posted its operating profits figure last year, which surged 21.3 percent year-on-year to 57.8 billion yuan (7 billion US dollars). The BOC's 2004 net profits were level with 2003, amounting to 20.9 billion yuan (2.5 billion dollars).

    Wang said that the bank's negotiation with potential strategic investors, who will buy its shares and help streamline its operation, is "well under way." Citing a "commercial secret concern," he declined to say which financial institutions the bank was talking to.

    "They are from European and Asian countries, as well as the United States. The negotiation has made some progress," he said.

    In the past decades, China's state banks were treated as a source of money to prop up failing government companies. This has left them debt-ridden and with little capital to meet regulator requirements, analysts say.

    Bank reform has been more urgent as China prepares to meet commitments to the World Trade Organization, opening its financialmarkets to foreign competitors by 2006.

    The country has selected the BOC and China Construction Bank (CCB) as pilot banks in sweeping reforms. At the end of 2003, the two received a combined 45 billion US dollars in foreign exchange reserves from the central government in a bailout plan to help boost their capital bases.

    Both BOC and CCB have been transformed into joint-stock enterprises and introduced corporate governance featured by a shareholders' meeting, board of directors, board of supervisors and senior management.

    Figures released Tuesday show that the BOC's capital adequacy ratio, a measure of its own capital to total lending, had climbed to 10.04 percent by the end of last year. This is above the 8 percent international requirement for a commercial bank.

    Its non-performing loan (NPL) ratio stood at 5.12 percent, as compared to the 1 to 2 percent level recorded by famous foreign banks.

    Guo Shuqing, the CCB chairman, said earlier that his bank had finished its prospectus for listing and is also trying to go public this year.

    Industrial insiders predict that the BOC and CCB will list in Hong Kong, New York or London.

    The China Banking Regulatory Commission has said the reform of the two other state banks, the Industrial and Commercial Bank of China (ICBC) and Agricultural Bank of China (ABC), would also be advanced.

    Last month, China announced plans to inject 15 billion dollars into the ICBC, the country's biggest state-owned commercial bank, in a bid to turn it into a profitable, independent competitor. Thebank will use the money to replenish its financial reserves. Enditem