NEWSMAKER-China soldier-turned-banker takes aim at mega IPO

* Fought, wounded in 1979 Sino-Vietnamese border war

* Offloaded $120 bln of bad loans to govt-backed agency

* Wrote award-winning screenplays about auditing

By Michael Wei and Benjamin Kang Lim

BEIJING, June 8 (BestGrowthStock) – 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,

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BANK TURNAROUND

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 specialising 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.

Investment Advice

(Editing by Michael Flaherty, Ken Wills and Ian Geoghegan)

NEWSMAKER-China soldier-turned-banker takes aim at mega IPO