(Updates with Xiao resignation from Bank of China in third paragraph.)
March 17 (Bloomberg) -- Xiao Gang, who resigned today as chairman of Bank of China Ltd., was named head of the nation’s securities regulator, succeeding Guo Shuqing, said a person with direct knowledge of the appointment.
Xiao’s appointment was announced to China Securities Regulatory Commission staff at a meeting today, said the person who asked not to be identified because he wasn’t authorized to speak to the media. Guo’s future role wasn’t disclosed at the meeting, the person said.
Bank of China said in a statement to Hong Kong’s stock exchange that Xiao had resigned because of “the needs of national financial work,” without elaborating.
The move comes as the appointments of Xi Jinping as China’s president and Li Keqiang as premier cement a leadership transition that also saw the splitting of the Railway Ministry, the selection of a new Foreign Minister and Zhou Xiaochuan’s reappointment as central bank governor. In his first press briefing as premier, Li pledged today to continue financial reforms in the world’s second-biggest economy.
Xiao, 54, who is fluent in English, worked in various positions at China’s central bank for more than 20 years, according to the Bank of China’s annual report. He eventually became deputy governor of the central bank before joining Bank of China, the nation’s fourth-biggest listed lender.
Like other key party and government posts, the top jobs at Bank of China, ICBC and other large state-owned banks and companies are assigned by the ruling Communist Party’s central organization unit. The executives, who are also party members, are under the oversight of its disciplinary committee.
Bank of China’s profit has grown by an average 31 percent a year since 2006, when its shares started trading in Hong Kong and Shanghai. Its stock price has fallen 39 percent over the past five years in Shanghai, compared with a 24 percent drop for Industrial & Commercial Bank of China Ltd., the nation’s biggest lender.
The Wall Street Journal reported March 14 that Xiao would be named head of the securities regulator and that Guo would be appointed governor of Shandong province in eastern China. Calls to the regulator’s press office today seeking comment went unanswered.
The CSRC has expanded foreign investor quotas to buy stocks, cut trading fees and pushed companies to increase dividends since Guo became chairman in 2011. The Shanghai Composite Index entered a bull market on Jan. 29 after rallying 20 percent from a three-year low on Dec. 3.
Guo has also overseen a surge in corporate bond sales as part of China’s effort to wean companies of a dependence on bank lending to finance their operations. Sales of corporate bonds more than doubled last year to 1.41 trillion yuan ($227 billion) as share sales declined 12 percent to 286 billion yuan, according to data compiled by Bloomberg.
--Wenxin Fan and Steven Yang. Editors: Allen Wan, John Liu