China’s State Council has approved Bank of Communications’ (BoCom) reform plan to optimize its ownership structure through the introduction of private shareholders and an employee stock ownership plan.
BoCom, China’s fifth largest lender by assets, in an exchange filing said reform won’t weaken the central government’s control over the bank.
The bank also said that it will pursue incentive shemes for employees through stock options, which will allow the bank to hike pay of its senior executives following big pay cuts implemented across China’s banking sector in 2015.
BoCom is the first of China’s five state-owned banks to start reforms under Beijing’s two-year-long overhaul of its state-owned enterprises (SOEs).
With a 19% stake, HSBC is currently the largest foreign shareholder in BoCom.
When queried about the development, HSBC told Reuters it currently had no plans to change is shareholding in BoCom.
"BoCom is a long-term strategic partner," the publication quoted HSBC senior media relations manager Vinh T Tran as saying.