By Diao Ying (China Daily)
Updated: 2008-03-03 07:07

The China Development Bank (CDB) will mainly serve medium- and long-term national development strategies even after it is transformed into a commercial bank, a senior executive said yesterday.

A China Development Bank office in Shanghai. The China Development Bank (CDB) will mainly serve medium- and long-term national development strategies even after it is transformed into a commercial bank, a senior executive said March 2nd, 2008. [China Daily]

The CDB cannot turn into a commercial bank immediately since it does not accept individual deposits now, but it will start doing so in the future, said Liu Kegu, vice-governor of the bank.

The CDB is one of the three policy lenders in the country.

The CDB at the end of last year received the first $5 billion of the planned $20 billion recapitalization from Central Huijin, an investment arm incorporated into China Investment Corp (CIC).

Liu said the capital injection will not affect the CDB's credit rating since it has the best asset quality among domestic banks. It has a non-performing loan ratio below 1 percent - much lower than that of major commercial banks.

The CDB will retain its long-term credit business and the right to issue financial bonds in the interbank market.

The lender has generated controversy in the banking industry by increasingly becoming involved in commercial business in recent years.

Earlier reports said that the CDB is planning to expand into financial leasing to diversify its business. It is reported to be on the verge of acquiring Shenzhen Financial Leasing Co Ltd for 7 billion yuan, by taking a 90 percent stake.