THE Bank of Beijing received regulatory approval yesterday to issue 1.2 billion shares in Shanghai, putting it on a path to become the third city-level lender on the Chinese mainland to launch an initial public offering.
The Beijing-based bank's IPO proposal was approved by the China Securities Regulatory Commission, the stock regulator said on its Website. The timetable and size of the share sale were not disclosed.
The Bank of Beijing, the biggest mainland city commercial lender by assets, said in a preliminary prospectus that the planned yuan-denominated equity issue will account for 19.27 percent of its enlarged stock base.
The lender, 19.9 percent owned by ING Groep NV, has net assets per share of 1.96 yuan (26 US cents) in advance of the stock issue and held 263.9 billion yuan in total assets at the end of March.
Earlier media reports said the Bank of Beijing is expected to raise about 13 billion yuan in the IPO.
Its capital-adequacy ratio, which measures capital against risk-weighted assets, amounted to 13.23 percent on March 31 while its non-performing loan ratio was 3.34 percent, according to an earlier statement.
After the stock issue, the ING stake will be diluted to 16.07 percent. The Dutch lender and other big shareholders can't sell their holdings within three years after the IPO. The International Finance Corp under the World Bank holds five percent of the bank.
"The stock issue will further bolster the lender's capital and help it conduct regional expansion," said Wu Ke, a Zhongtian Investment Consulting Co analyst. "The bank will likely enjoy the privilege of its location and benefit from the Olympic Games next year in Beijing."
Early last month, the Bank of Beijing was given the go-ahead to launch a branch in Shanghai, which became the lender's second venture outside the nation's capital. The bank's Tianjin branch opened in November last year.
The bank has said it will issue H shares in the Hong Kong stock market after the A-share flotation, though the schedule had not been decided as of yesterday.
The Bank of Nanjing and Bank of Ningbo in July became the first city banks to list domestically, stoking investor frenzy over smaller lenders, which usually feature better loan quality than their bigger rivals.