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Agricultural Bank of China’s (ABC) public float may not materialize this year as differences still persist over the future of the lender’s business related to the agriculture sector and farmers, according to a source familiar with the matter.

“Though the bank is basically ready for the initial public offering (IPO), top policymakers are yet to reach a consensus on whether to run the lender as a commercial entity or maintain its rural finance unit as a policy lending arm of the State,” the source told China Daily, on condition of anonymity due to the sensitive nature of the issue.

The development follows earlier reports in this paper that the bank intends to raise up to 150 billion yuan through an IPO as early as April this year.

“The crux is whether the bank’s rural finance arm will continue to enjoy government subsidies after the share flotation. Otherwise, the bank could be listed as originally scheduled,” the source said.

Pan Gongsheng, vice-president of ABC, had earlier said that the lender has “no fixed timetable” for the IPO, but intends to list this year.

ABC is the only lender among the “Big Four” State-run banks that is not listed. It has been under close market watch for some time now and there have been doubts about how it would strike a balance between its government-directed mission of providing rural finance services and its profit-oriented urban businesses.

The lender, with 53 percent of its banking network and 46 percent of its employees serving farmers and agriculture-related businesses, kicked off the trial reform of its rural business operations in 2008.

As part of the reform, a new unit, covering its 2,048 county level outlets, was set up to specifically focus on rural finance.

By undertaking such a step, the bank planned to clearly demarcate the performance of its urban and rural businesses. It would also enable the bank to offer a clear book to investors on how much it has invested in agriculture-related businesses and the returns generated.

Xiang Junbo, chairman of the bank, said in a recent interview that the lender’s listing timetable depends largely on the progress it makes in rural finance reform.

The chairman said apart from the reform, the bank would also strive to strengthen its business development in the nation’s 50 major cities this year.

“We expect to achieve breakthroughs in our urban business this year and also change the impression that we lag others in key cities over the next three years,” Xiang said.

Last year, the bank advanced 364.5 billion yuan in new loans to rural areas, accounting for about one third of the total new lending for the period.

By Wang Bo