Newsmaker: China soldier-turned-banker takes aim at mega IPO
BEIJING (Reuters) - Xiang Junbo is a war hero and award-winning scriptwriter. He's also chairman of China's third-largest bank, founded by Mao Zedong, and had hoped to be launching the world's biggest-ever initial public offering.
But a slump in China's markets means Agricultural Bank of China's ABC.UL IPO may now raise nearer $20 billion than the hoped-for $30 billion, and Xiang will need all his long banking experience and business acumen to pull off the state-run group's much-needed fund raising.
Three years ago, when Xiang took over as chairman, having served as No.2 at both the central bank and National Audit Office, AgBank was considered to be almost insolvent.
The Beijing-based bank, founded in 1951 as the rural unit of the central bank, is now in better shape but is still viewed as the weakest among China's big lenders.
Xiang, 53, faces an uphill battle to turn the bank into a dual-listed public company, but he's overcome bigger hurdles.
Aged 22, Xiang joined the army and fought in the brief but bloody Sino-Vietnamese border war in 1979. He was wounded in the leg and won a Second-Class Merit for his bravery, according to the China Youth Daily.
After discharge, Xiang heeded his university professor father and became a finance major at the prestigious Renmin University in 1981, despite his love for literature and the Arts.
While pursuing a banking career, he did, however, manage to produce award-winning screenplays, writing about the auditing industry and fighting corruption,
AgBank today boasts nearly 24,000 branches and employs more than 441,000 people, eclipsing Industrial and Commercial Bank of China (1398.HK) and China Construction Bank (0939.HK), the world's two biggest banks by market value.
"From his experiences, Xiang gained the qualities a top banker needs -- prudence, innovative thinking and fearlessness, which are particularly important at a time like this," a source close to Xiang told Reuters. The source declined to be named due to sensitivities around the bank and its IPO.
As the bank closest to the masses, AgBank has 350 million customers, more than the population of the United States.
Heavy dependence on China's vast yet poor rural area, however, led to AgBank's non-performing loan ratio reaching 27 percent at the end of 2007.
The following year, Xiang managed to transfer some 810 billion yuan (about $120 billion) in bad loans to a government-backed asset management company, slashing the bank's bad loan ratio to just 3.66 percent at the end of 2009.
Xiang was also instrumental in turning AgBank into a joint stock company in January 2009 that helped the lender grow to a financial titan with total assets of $1.4 trillion as of March.
POET AND DRAMA WRITER
Xiang was born in 1957 in Chongqing, China's wartime capital. In his teens, he became a farmer, having taken up Chairman Mao's call for young people to go to the countryside. Later, his father's advice to study finance proved prescient.
In the two decades that followed, Xiang was fortunate to be a top talent specializing in business as China shifted its focus to economic development from political campaigns.
With more than 20 years of auditing experience, Xiang, who holds a law doctorate from the elite Peking University, is well known for his prudence, which played a critical role in AgBank's risk control and anti-corruption drive.
Xiang never relinquished his pursuit of literature, and his works cover a wide range of themes, mostly based on his own experience and local customs in his home province, according to the Southern People weekly magazine.
He is best known for films about battling corruption, including the television drama "People Never Forget" and the award winning movie "The Crack," the magazine said.
Despite his hectic schedule, Xiang still reportedly tries to find time to write scripts, but the demands of shepherding one of the world's largest IPOs may make that an unaffordable luxury just now.
(Editing by Michael Flaherty, Ken Wills and Ian Geoghegan)
DETROIT/NEW YORK - Ford Motor Co's board of directors plans to press Chief Executive Alan Mulally soon for a decision on his future, as speculation intensifies that he may be offered the job of CEO at Microsoft Corp.
WASHINGTON - U.S. small business sentiment bounced back from a seven-month low in November, with owners setting their sights on creating more jobs and expanding operations.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.