"We are not ready for an IPO," said Chang Zhenming, president of the bank. "Market conditions are also not mature."

But the president said the bank would actively prepare for that and await better market conditions, China Daily reported Wednesday.

"We will choose the best time," he said, without mentioning an exact timetable or venue.

The bank formally established a joint stock company - China Construction Bank Corporation - yesterday.

The bank, which won a US$22.5 billion bail-out from the State last December, was chosen by the central government as a pilot for the country's banking reforms.

Government approval was given in June for it to separate into the China Construction Bank Group and China Construction Bank Corporation - a joint stock listing vehicle.

The joint stock firm, with a registered capital of 194.23 billion yuan (US$23.4 billion), has five founding shareholders.

The largest shareholder is the Central Huijin Investment Co, which controls an 85.228 per cent stake in the joint stock firm.

Baosteel Iron and Steel Co Ltd, China's top steelmaker, and electricity giant State Grid Corp each hold 1.545 per cent stakes.

Yangtze Power, which operates the Three Gorges Dam project, has a 1.030 per cent stake.

The remainder goes to China Construction Bank Investment Co Ltd, which replaced the China Construction Bank Group.

The joint stock company continues to operate the bank's commercial banking business, including its domestic and foreign currency deposits, loans, bank cards and clearing.

The joint stock company also has plans to usher in foreign investors as its equity owners, a move aimed at increasing its capital strength, optimizing capital structure and diversity of ownership.

Chang said his bank aims to transform itself into a modern share-holding commercial bank, and competitive heavyweight in the global financial market within three years.

Dong Chen, a senior analyst with China Securities, said Chinese commercial banks would have to sharpen their competitive edge before foreign banks have unrestricted access into the Chinese market at the end of 2006.

"They will have to lower the rate of non-performing loans, get rid of historical financial burdens and raise their capital adequacy to international standards," he said.

By the end of June, the non-performing asset rate of China Construction Bank dropped 5.69 percentage points from the first quarter of this year to reach 3.08 per cent.

With the aim of replenishing the bank's capital base, China Construction Bank plans to issue no more than 40 billion yuan (US$4.8 billion) worth of subordinated bonds. The bonds rank after other bank liabilities in terms of claims on bank assets.

After issuing all the bonds, the bank's capital adequacy level is expected to reach more than 8 per cent.

Last month, Bank of China, another bank selected by the central government under its pilot banking reforms, reorganized itself into a joint stock company, following the establishment of the Bank of China Limited.

The joint stock company, which has a registered capital of 186.39 billion yuan (US$22.5 billion), took control of all of Bank of China's assets, debts, employees and business.