Further executive reshuffles made at nation's major banks

China's main banks have seen further changes made to their top executive positions, in what are being seen as the latest steps to speed up reform of the country's leading financial institutions.

Bank of China Ltd, the country's fourth-biggest lender, on Monday appointed 54-year-old Tian Guoli as its new Party chief, one month after former chairman Xiao Gang took over as the country's top securities regulator.

Tian, who was former chairman of China Citic Bank, was listed on BOC's website as Party secretary. As is customary, he is also expected to become chairman.

Later on the same day, Hu Huaibang, chairman of Bank of Communications Co, resigned due to "the demands of national financial work", according to a statement by the country's fifth-largest commercial bank.

It has been rumored that the 58-year-old Hu will replace Chen Yuan as chairman of Beijing-based China Development Bank Corp, the world's largest policy bank, although the bank hasn't made any official announcement yet.

Chen, 68, is being tipped to lead the setting up of a new development bank for the BRICS countries, which groups China with Brazil, Russia, India and South Africa, Caixin reported.

There is no information on successors for Tian and Hu.

All the changes come as part of China's once-a-decade leadership transition, which saw the nomination of a new finance minister, Lou Jiwei, and Zhou Xiaochuan's reappointment as central bank governor.

Taking into consideration personnel changes last year in China Construction Bank Corp, Shanghai Pudong Development Bank, and Ping'an Bank, analysts said China's financial institutions have entered an intensive phase of the rotation of senior executives.

However, the executives will face challenges in their new posts, as financial reforms gain pace.

BOC now has the biggest overseas operations among all Chinese banks, accounting for about 23 percent of its assets at the end of December, according to data compiled by Bloomberg.

The bank is also the only Chinese lender included in the Financial Stability Board's global list of 28 systemically important financial institutions.

Under former chairman Xiao, who resigned on March 17 to become chairman of China Securities Regulatory Commission, BOC steered through the global economic crisis to report record profits.

However, the bank's competitiveness has been declining over the past decade.

In 2003, BOC's net profit was the largest among the big-four commercial banks, but it slid to fourth in 2012.

Guo Tianyong, director of the Research Center of the Chinese Banking Industry at Central University of Finance and Economics, said Tian's major task will be to take advantage of the internationalization of the renminbi, reinforcing BOC's traditional advantage in overseas markets, and strengthening its domestic businesses.

Measures to be adopted include developing loans with higher profit margins targeted at small and micro businesses, and establishing a global service network for Chinese enterprises with overseas operations, analysts said.

The biggest challenge facing Hu would be the further transformation of CDB into a commercial bank.

CDB was a policy bank before it was reconstructed into a commercial bank in late 2008, but many old issues remain.

"An urgent issue is its source of funding," said Jin Lin, an analyst with Orient Securities Co.

Jin explained that the CDB has very few branches, and its funding used to rely on policy-oriented financial debt, which is popular among institutional buyers because of its zero risk of default.

CDB is the second-largest debt issuer in China only after the Ministry of Finance, with a debt stock of 5 trillion yuan ($808.5 billion).

"However, the bank's financing costs will inevitably rise after transforming into a commercial bank, thus it is doubtful if the bank could maintain its profitability," Jin said.

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