Chinese banks holding share sales in bid to expand

BEIJING • China's city commercial banks are seeking to replenish capital to expand out of their home bases and compete with larger, better-funded rivals.

Days after Bank of Jinzhou took orders for a US$943 million (S$1.3 billion) Hong Kong initial public offering (IPO) and Bank of Zheng-zhou planned to seek more than US$500 million from a share sale next month, Bank of Qingdao raised US$607 million after pricing a Hong Kong IPO at the low end of a marketed range, sources said.

The Shandong province-based bank - backed by Italy's Intesa Sanpaolo - and one of its shareholders, the National Council for Social Security Fund, sold 990 million shares, sources said.

The shares were offered at HK$4.75 to HK$5.21 each, according to a prospectus posted to the Hong Kong stock exchange on Nov 20.

Bank of Qingdao plans to begin trading on Dec 3, its prospectus shows. Goldman Sachs and Citic CLSA Capital Markets are joint sponsors of the deal. 

A Hong Kong-based external spokesman for Bank of Qingdao declined to comment.

Bank of Jinzhou and an existing shareholder are offering 1.32 billion shares at HK$4.64 to HK$5.54 apiece, according to terms for the deal obtained by Bloomberg.

The bank, founded in 1997, had 178 outlets at the end of June, including 20 located outside its home province of Liaoning, according to a pre-listing filing.

Hong Kong IPO fund-raising is set to rise to a five-year high for 2015 as Chinese state-owned enterprises seek listings.

First-time share sales in the financial hub have already raised US$28.5 billion this year, up from US$18.3 billion for the same period last year, data compiled by Bloomberg shows.

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A version of this article appeared in the print edition of The Straits Times on November 27, 2015, with the headline 'Chinese banks holding share sales in bid to expand'. Print Edition | Subscribe