Sun confirmed the New York branch of BOC was probed and punished for its misconduct by the People's Bank of China (PBOC) -- China's central bank -- and the Office of the Comptroller of the Currency (OCC), a division of the US Department of Treasury.

Bank of China, one of China's four largest State-owned commercial banks, has attached great importance to the case and carried out a series of remedy measures to stamp out irregularities and improve the internal management. Sun said: "Efforts have been acknowledged by Chinese and US regulators.

The bank is deepening internal reforms to meet the challenges posed by China's accession to the World Trade Organization (WTO).''

The bank will pay attention to and strengthen its supervision and management on its home and overseas branches, and continue to provide quality services to customers in line with its principle of consistent cautious management, he said.

According to a BOC spokesman, the recent investigation and the penalties by regulators are measures taken against the misconduct from 1991 to 1999 by the prior management of the New York branch.

Since March 2000, under new leadership, the BOC embarked on the development and implementation of processes to ensure good corporate governance, enhanced information disclosure and the identification of deficiencies in its management and operations, the spokesman said.

Therefore, the bank has ruled out managerial deficiencies that might cause similar problems, he said.

A report by the National Auditors Office said reform measures have yielded positive results.

"The bank's profits increased and the management was beefed up,'' the report said. "None of the bank's overseas branches were found guilty of misconduct last year.''

Last year, the bank's non-performing loan ratio decreased by 4.07 percentage points to 24.17 per cent, the spokesman said.

It also reported a profit of 10.8 billion yuan (US$1.3 billion) last year.

Profits made by branches at the Chinese mainland rose 4.7 per cent from a year ago to 2.25 billion yuan (US$271 million), while that made by overseas branches dropped 9.85 per cent to 8.56 billion yuan (US$1.03 million), the spokesman said.

Among the Fortune 500, the bank ranked 251 last year, compared to 255 in 2000.

In the July issue of Euromoney magazine, the Bank of China was awarded the title of "The Best Bank in China'' for the eighth consecutive time.

The Asian Bankers also named the Bank of China "The Excellence in Retail Banking Award 2001'' in China.

(China Daily January 22, 2002)