July 25, 2014 / 10:28 AM / in 3 years

UPDATE 1-China's Bank of Communications seeks more private investors -sources

(Adds comment from BoCom economist, no comment from spokespeople)

BEIJING, July 25 (Reuters) - China’s Bank of Communications Co Ltd (BoCom) plans to sell stakes to private investors under a government reform aimed at letting private capital play a bigger role in the economy, two people familiar with the matter said.

The country’s fifth-biggest bank by assets has applied to become the first state-controlled lender to pilot so-called hybrid ownership, the people told Reuters on Friday.

The application comes just over a week after the government named six state-owned enterprises (SOEs) that it wanted to revamp operations to attract investment.

The government in November ordered SOEs to bring in private investors to improve efficiency and competitiveness and help reduce debt, with the ultimate aim of supporting the economy.

“BoCom has submitted an application for a pilot scheme and is awaiting approval from relevant government departments,” said one of the people, who declined to be identified.

BoCom is a joint-stock bank whose biggest shareholder is the Ministry of Finance with 27 percent, followed by HSBC Holdings PLC with 19 percent.

Spokespeople at the bank were not immediately available for comment.

BoCom chief economist Lian Ping told Reuters: “For state banks, pushing forward mixed ownership reform helps improve corporate governance after they’ve achieved join-stock systems and stock listings.” (Reporting by China economics team; Editing by Christopher Cushing)

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