China's Bank of Communications Co. Ltd. proposed to set up an asset management unit specializing in debt-to-equity swap business.

Bocom Assets Management Co. Ltd. will be established with a registered capital of 10 billion yuan. The proposal is subject to regulatory approval. The unit will operate as a tier-1 subsidiary of the bank.

Bank of Communications is not the only Chinese bank to set up an asset management unit for debt-to-equity swap business after the government started a debt-for-equity scheme in October 2016 to reduce corporate debt in the country. China Construction Bank Corp. and Bank of China Ltd. announced plans to set up separate asset management units in December 2016.

As of Jan. 18, US$1 was equivalent to 6.83 Chinese yuan.