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China seeks ABC restructuring

China's central bank would like to see the Agricultural Bank of China (ABC) broken up in order to overcome its financial troubles and recent poor performance, local newspapers have reported.

According to the China Business Post, the proposals, which have been sent to Chinese authorities, include dividing up ABC into several provincial banks, abolishing its Beijing headquarters in the process.

The move is said to be the preferred option of the central bank, as it would allow the financial burden of past errors at ABC to be shared between national and regional governments.

The bank's net profit for 2005 fell by nearly 50 per cent compared to a year earlier, down to $130 million from $249 million in 2004, with nonperforming loans accounting for around 26 per cent of the 2005 total.

It is currently the worst performing of China's four huge state-owned commercial banks, failing to capitalize, as the others have, on strategic foreign investment.