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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