Zhang Jianguo, head of ICBC's international business division, told Reuters ICBC hoped to utilise Hong Kong's role as a global financial hub to beef up its foreign currency operations and planned a shake-up of its Hong Kong units.

"We expect to move it to Hong Kong by the end of this year," Zhang said in a telephone interview from Beijing. "The plan has entered the implementation stage."

He said Hong Kong's strength in information, technology and market mechanism can help ICBC enhance foreign exchange business.

Bank of China, the country's largest foreign exchange bank, moved its foreign exchange trading office to Hong Kong in 1999 and began trading early this year.

Analysts expect the other two major state banks, the China Construction Bank and the Agricultural Bank of China, to follow suit in the coming years. The "Big Four", which make up over 90 percent of all bank lending, have been staggering under a mountain of bad debts. They are hugely overstaffed and have little skills in credit analysis.

Another ICBC official said ICBC's foreign exchange trading turnover reached more than US$10 billion last year. "Turnover should be expanded after we move the dealing room to Hong Kong," said the official, who requested anonymity. Zhang said ICBC now had outstanding foreign exchange deposits of US$20 billion and foreign exchange loans of US$8 billion.

Zhang, who was in Hong Kong last week signing a cooperation agreement with ICBC's recently-acquired Union Bank, said ICBC would shake up the businesses of its Hong Kong banks.

ICBC now had four banks in Hong Kong, including the Hong Kong branch of ICBC, its 60 percent-owned ICEA, majority-owned Industrial and Commercial Capital Ltd and Union Bank.

-- (Reuters)