China's banks have been scrubbing hard, hoping to make themselves clean enough to attract foreign capital. If you believe official figures, their non-performing loan (NPL) ratio fell to 13.2% at the end of last year, from nearly 18% in 2003. None has scrubbed harder than the two big state banks being groomed for strategic investment and flotation: Bank of China (BOC) said last month that its NPL ratio was just 4.7%, and China Construction Bank (CCB) claims 3.7%. Independent data are also looking less gloomy. Standard & Poor's, a credit-rating agency, reckons 35% of loans will go sour, down from its previous estimate of 50%. This may help win round foreign banks, which have so far resisted taking stakes. Royal Bank of Scotland is said to be ready to pay up to $4 billion for up to a fifth of BOC, although the Edinburgh bank would not be drawn at its annual meeting on April 20th. There are also rumours that foreigners are preparing to buy a stake in CCB.
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