June 12, 2009

Bank of China Ltd. is aiming to reduce the ratio of foreign-currency assets in its portfolio by focusing on new yuan loans, its chairman said.The state-controlled lender aims to provide about 10% of new yuan loans in China this year and plans to adjust its asset portfolio and loan structure to better cope with the global crisis and economic uncertainties, Xiao Gang said Thursday.

Bank of China plans to reduce the weighting of its foreign-currency assets in its portfolio by 10 to 15 percentage points "over the next few years," from 35% now, Mr. Xiao said in an interview.Bank of China's large holdings of foreign-exchange assets have placed the bank at a disadvantage in recent years as the appreciating yuan has meant smaller profits generated by foreign-currency assets. The bank has also acknowledged that it has lagged its peers in building yuan-denominated business.