China's Postal Savings
Bank files for potential $10 billion IPO
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[June 30, 2016]
HONG KONG (Reuters) - State-owned Postal Savings Bank of China (PSBC),
the country's largest bank by number of branches, has filed for a Hong
Kong initial public offering (IPO) seeking to raise as much as $10
billion, Thomson Reuters IFR reported on Thursday.
The filing of the preliminary IPO prospectus sets in motion what is
expected to be the world's biggest new listing in about two years,
valuing the bank at about $50 billion, IFR said, citing sources close to
The IPO, aimed at raising between $7 billion and $10 billion, could
happen as early as September, it said. A PSBC [IPO-PSBC.HK] spokeswoman
declined to make immediate comment on the filing.
PSBC's planned offering comes against the backdrop of a nearly 60
percent drop in Asia-Pacific share offerings, ex-Japan, in the first
half of 2016 amid the weakest activity since 2008.
Share sales in the region have been hit by volatile equity markets,
China's slowest growth in 25 years and growing uncertainty after
Britain's vote to leave the European Union.
PSBC, which has more than 40,000 branches nationwide and is considered
to have a much lower ratio of bad loans than rivals, was set up as a
deposit-taking bank in 2007, using the network of the former postal
The lender plans to sell up to 13.9 billion Hong Kong shares and use the
proceeds to bolster its balance sheet, according to a statement on the
website of the China Banking Regulatory Commission on June 24.
If the IPO of PSBC, which has about 500 million clients or nearly half
of China's population, hits its fund-raising target, it would be the
biggest market debut since Alibaba Group's <BABA.N> record $25 billion
listing in September 2014.
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People walk past a sign outside a
branch of Postal Savings Bank of China (PSBC) in downtown Beijing,
China, November 12, 2015. REUTERS/Kim Kyung-Hoon/File Photo
strong response to the offering could revive the sluggish IPO market, with
Chinese brokers including Everbright Securities Co <601788.SS>, China Merchants
Securities Co <600999.SS> and China Securities Co looking to raise funds in Hong
While most large peers including Industrial and Commercial Bank of China
<1398.HK> and Agricultural Bank of China <1288.HK> trade at prices below their
book value, PSBC plans to sell shares close to book value, sources have said.
Because of its focus on small loans, the bank has a cleaner balance sheet than
many other Chinese commercial lenders saddled with bad debts from property
developers, steelmakers and other industrial conglomerates, analysts and
investors have said.
Bank of America Merrill Lynch, China's domestic investment bank China
International Capital Corp <3908.HK>, Goldman Sachs, JPMorgan and Morgan Stanley
are joint sponsors on the IPO. UBS is also a joint global coordinator, IFR
(Reporting by Fiona Lau and Ken Wang; Additional reporting by Shu Zhang in
Beijing; Writing by Sumeet Chatterjee; Editing by Denny Thomas, Clarence
Fernandez and David Goodman)
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