China Postal Savings Bank gets official blessing

The China Banking Regulatory Commission has officially approved the establishment of the China Postal Savings Bank.

The major shareholder will be the China Post Group, formerly known as the State Post Bureau, which will provide the postal savings business through its 36,000 outlets nationwide.

By transferring the group’s vast network of savings accounts into CPSB, the bank will become the mainland’s fifth-largest bank by deposits, trailing only the four state- owned lenders _ Industrial and Commercial Bank of China (1398), Bank of China (3988), China Construction Bank (0939) and Agricultural Bank of China.

As at the end of June 2005, the total balance of postal savings in China reached nearly 1.3 trillion yuan (HK$1.29 trillion ), representing a 9.25 percent share of the mainland’s savings market.

The regulatory commission’s vice chairman Cai Esheng said earlier that CPSB will make use of its vast network of savings accounts to provide financial services for both urban and rural residents.

The central government has indicated that improving financial services in the countryside would be a priority in the future.

CPSB said it would focus on retail banking and intermediary services and adopt high standards of internal control and risk management.

“The ultimate goal is to build the bank into a competitive and safe modern bank with adequate capital and strong internal controls,” CBRC said.

Previously, postal savings were transferred to the accounts of the People’s Bank of China. Since August 1, 2003, the deposits were transferred to, and consequently managed by, the State Post Bureau. Deposits made before that date remained with the Chinese central bank which paid 4.131 percent in interest.