Is Bank of China State Owned and Why It Matters

Bank of China is indeed state-owned, with the Chinese government holding a majority stake in the bank. The government's ownership is a significant factor in the bank's operations and decision-making processes.

The state's ownership of Bank of China dates back to 1980, when the Chinese government took control of the bank as part of a broader effort to reform the country's state-owned enterprises. This move allowed the government to consolidate its control over the financial sector and implement policies that would promote economic growth and stability.

As a state-owned bank, Bank of China is subject to the government's regulatory oversight and policy direction. This means that the bank's lending and investment decisions are influenced by the government's economic goals and priorities. The government's ownership also provides the bank with access to cheap funding and other benefits that can help it compete with private banks.

The Bank of China's ownership structure is a complex mix of state and private ownership. China Central Huijin, an investment arm of the government, holds a significant 64.63% of the bank's ordinary shares.

The remaining shares are held by various entities, including HKSCC Nominees Limited, which holds 27.78% of the H shares. This highlights the role of state-owned entities in the bank's ownership.

China Central Huijin's control over the bank's ordinary shares gives the government a substantial say in the bank's operations. This is reinforced by the fact that China Securities Finance, a state-owned legal person, also holds a 2.90% stake in the bank's ordinary shares.

Here's a breakdown of the largest shareholders of the Bank of China ordinary and preference shares as of 30 September 2015:

The 2010s was a decade of significant expansion for the Bank of China (BOC). In 2010, the New York branch of the BOC began offering renminbi products for Americans.

The BOC made a major breakthrough in 2015 by gaining entry to the London Bullion Market Association gold price auction, becoming one of eight members to the auction. This marked a significant step into the global commodity market.

Between 2015 and 2020, the BOC lent over US$185.1 billion for Belt and Road Initiative projects. The sheer scale of these loans demonstrates the bank's commitment to supporting global development.

In 2016, the BOC received permission to open a branch in Brunei, and opened a branch in Mauritius, becoming the first Chinese-funded bank in Mauritius. This marked a significant expansion into new markets.

The BOC operated outside of mainland China in 27 countries and areas by 2017, including major economies like the United States and Japan.

As of 30 September 2015, the largest shareholders of the Bank of China ordinary shares held a significant amount of the bank's ownership.

China Central Huijin, an investment arm of the government of the People's Republic of China, owned 64.63% of the Bank of China's ordinary shares, both A shares and H shares.

HKSCC Nominees Limited, a nominee account, held 27.78% of the Bank of China's H shares.

China Securities Finance, a state-owned legal person, owned 2.90% of the Bank of China's A shares.

The Bank of China's preference shares were also held by various entities, with The Bank of New York Mellon, a custodian bank, owning 39.96% of the offshore preference shares.

China Mobile Communications and China National Tobacco Corporation, both domestic entities, owned 18.01% and 5.00% of the Bank of China's domestic preference shares, respectively.

China Mobile Communications was the largest domestic shareholder of the Bank of China's preference shares, owning 18.01% of the domestic preference shares.

Zhongwei Real Estate, a domestic entity, owned 3.00% of the Bank of China's domestic preference shares.

Here's a breakdown of the largest shareholders of the Bank of China ordinary and preference shares as of 30 September 2015: