Chinese School - Bank names underwriters

BIZCHINA / Center

Bank names underwriters

By Zhang Lu (China Daily)
Updated: 2006-12-08 09:15

Bank of Beijing, one of China's largest city commercial banks, has chosen
underwriters for its US$750 million to US$1 billion initial public
offering (IPO) next year.

Reuters and Bloomberg said yesterday Bank of Beijing chose Goldman Sachs,
Merrill Lynch and CITIC Securities to underwrite the IPO, quoting an
unnamed source.

The lender plans a Hong Kong listing and is also considering a domestic A
share offering, the report said.

The bank declined to comment on the situation.

The bank is one of many city commercial banks seeking to list on the Hong
Kong and Shanghai stock markets following the listing of State-owned and
joint stock commercial banks to boost capital.

Other banks include Bank of Shanghai, Ningbo City Commercial Bank and
Nanjing City Commercial Bank.

The city commercial banks are considered ready for the stock market, as
they have gone through restructuring, introduced foreign strategic
investment and achieved a good level of capital adequacy ratio.

"More IPOs, especially from city commercial banks, will follow next
year," said Dirk Chanmueller, finance services industry head of Capgemini
China.

He said he believes a stable share price for those banks that recently
launched IPOs will encourage followers in 2007.

Shares of Bank of China have traded around 3.6 yuan (46 US cents) in the
past few weeks on the Shanghai Stock Exchange.

Shares of the Industrial and Commercial Bank of China closed at 3.85 yuan
(49 US cents) in Shanghai yesterday, nearly 24 per cent higher than its
IPO price.

China has been encouraging its banks to introduce foreign strategic
investors and go public to boost corporate governance and efficiency as
competition intensifies with overseas financial companies.

Bank of Beijing was founded in 1996 as Beijing City Commercial Bank.

The bank was renamed last January, when it first revealed its plan to
introduce foreign strategic investment and seek a public listing to
support its expansion.

Dutch financial giant ING and International Finance Corp, the private
equity arm of the World Bank, paid roughly US$225 million for nearly a
quarter of Bank of China in early 2005.

According to the bank, its non-performing loan ratio dropped to below 4
per cent in September from 4.08 per cent in June.

The bank's capital adequacy ratio improved to 13 per cent in September
from 12.85 per cent in June and 10.83 per cent at the end of last year.

As of September, the bank's total assets stood at 257.8 billion yuan
(US$32.63 billion) compared with 238.5 billion (US$30.2 billion) in June.

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