China Pension Invests $2.2 Billion in AgriBank

(May 24, 2010) — China’s national pension fund, National Council for Social Security Fund (SSF), invested more than 15 billion yuan ($2.2 billion) to become Agricultural Bank of China’s third-largest holder. Agricultural Bank of China will submit a plan to China’s Securities Regulatory Commission (CSRC) on May 28 to hold its first assessment meeting, Reuters reported.

As the country’s main national pension fund, the scheme has investments in all of the country’s largest listed state-owned banks. The deal shows preparation for an initial public offering that is expected to be the world’s largest at about $30 billion in a debut planned for Hong Kong and Shanghai by July.

Agricultural Bank of China, which is known as the smallest of China’s big four state-owned banks, is planning a massive initial public offering and seeking strategic investors. The Economic Observer reported that Agriculture Bank, the nation’s third-largest lender by assets, may raise $26 billion from the sale of shares in Shanghai and Hong Kong.

Established in 2000, the SSF was set up to provide a pension fund of last resort. However, the fund expects to more than double its assets under management in five years. The Financial Times reported that by the end of 2009, the fund had invested about 6.7% of its total assets abroad but it has a mandate to invest up to 20% of its capital overseas.