China's State Council, or the cabinet, approved on Wednesday a voluntary transfer by Central Huijin Investment Co of 3 billion Hong Kong-listed shares in the Bank of Communications (BoCom) to the Ministry of Finance.

The move was intended to "integrate state-owned financial resources and optimize the allocation of these resources," according to simultaneous statements by the ministry and Central Huijin.

The transfer still needed the approval of the China Banking Regulatory Commission, according to the statements.

The ministry will consolidate its position as BoCom's top shareholder after the transfer increases its stake to 26.48 percent.

Central Huijin, an investment arm of the government, formerly had a 6.12 percent stake. The company's withdrawal from BoCom was motivated by concerns that it had too many investments in the volatile finance sector, said Wu Yonggang, an analyst with Guotai Junan Securities Co Wu said that it was possible that the ministry wanted to tighten its grip on BoCom.

HSBC Holdings Plc, which holds about a 19 percent stake in BoCom, can continue buying the shares under a consensus reached by both parties.

Guo Tianyong, a researcher with the Central University of Finance and Economics, said that the dominant share holding would facilitate board management and personnel administration.

Other analysts said that the share transfer would have little impact on BoCom's development

Meanwhile, BoCom said in its 2007 annual report that it was preparing to establish credit card and pension fund companies. The Shanghai-based bank, China's fifth-largest lender, said net profit was 20.3 billion yuan ($2.86 billion), up 65 percent year-on-year.