Bank of China, the nation's second-biggest lender, said it is accelerating talks with potential investors in its initial public offer and will soon choose its partners.

　　"Bank of China is speeding up the process of choosing strategic investors and potential advisers," said Wang Zhaowen, a spokesman for Bank of China, at a press briefing in Beijing. "We will pick strategic investors by the end of June."

　　Selling a stake in the bank to an overseas investor may help China's oldest lender, founded in 1912, sell shares publicly for the first time. When the bank's Hong Kong unit sold shares in 2002, the city's biggest companies, including billionaire Li Ka-shing's Cheung Kong (Holdings) Ltd and Hutchison Whampoa Ltd, bought at least a quarter of the sale.

　　Bank of China and China Construction Bank, the nation's third-largest lender, have been given six months to reorganize themselves into companies that can sell shares to the public, according to a government statement on March 26. Bank of China didn't say who it had been talking to.

　　Bank of China will make a decision on the timing of its IPO by the end of this year, Wang said. In February, Zhu Min, an adviser to the bank's executive assistant president, ruled out an initial share sale this year because preparations aren't complete.

　　Bank of China's operating income in the first three months increased to 17.4 billion yuan (US$2.1 billion) from 13.6 billion yuan a year earlier, the lender said in a statement yesterday.

　　The lender set an operating profit target of 60 billion yuan for this year, up from 57 billion yuan last year.

　　Loans may slow in coming months after China raised the percentage of deposits banks must set aside as reserves, effectively reducing the amount of money banks have available for lending. The government is trying to curb inflation and rein in economic growth as investments in the steel, cement and aluminum industries jumped 53 percent in the first two months of the year.

　　"Loan growth will slow down," said Wei Yen, senior credit officer at Moody's Asia Pacific Ltd in Hong Kong. "There's only a limited number of good customers in China and some of these customers in the growth areas are the desirable ones."

　　Net interest income, the difference between the interest earned and interest paid, rose 17 percent. It didn't specify total interest income.

　　(Bloomberg News)