China Minsheng Banking Corp plans to issue convertible bonds this year to fund acquisitions and is still keen to list in Hong Kong in the first half of 2008, sources close to the situation said on Wednesday.

Beijing-based Minsheng Bank, a mid-sized lender partly owned by Singapore's Temasek Holdings, plans to apply to Chinese regulators to issue 20 billion yuan ($2.66 billion) of local currency-denominated convertible bonds, the sources said.

On Monday, Minsheng Bank announced it would buy 9.9 percent of San Francisco-based UCBH Holdings  for more than $200 million in the first investment by a mainland Chinese commercial bank in a U.S. bank.

Last month, Minsheng Bank said it planned to pay 2.34 billion yuan for a stake in China's Shaanxi International Trust & Investment Corp, as it wanted to expand in the country's trust sector, once in deep financial trouble.

"The bank is becoming very aggressive on acquisitions both at home and abroad, so they need money to carry out these deals," said one of the sources, who declined to be identified.

"A Hong Kong listing is still on its board's working agenda but there are lots of things to prepare for the IPO in Hong Kong and it is unlikely that the bank will finish everything this year," the source said, adding that the bank now aimed to list in Hong Kong in the first half of 2008.

Mao Xiaofeng, Minsheng Bank's board secretary, denied a media report that it planned to list on the London Stock Exchange next year but declined to comment on any other matters.

The South China Morning Post reported on Tuesday, citing people familiar with the situation, that the bank was considering selling shares in an initial public offering on the London Stock Exchange's main board next year to raise at least US$2 billion, instead of listing in Hong Kong or New York.

"It's completely groundless," Mao told Reuters when asked about the report.

"We will issue a stock filing to the Shanghai Stock Exchange tonight to deny the report and to clarify the situation," he said.

Minsheng Bank, China's first private bank, had previously planned to raise about HK$10 billion ($1.29 billion) through a Hong Kong IPO but the offer was delayed at least twice, partly due to tough stock market conditions in recent years.

The sources said Minsheng Bank had not yet settled on the size of its planned Hong Kong listing, which would largely depend on the market environment at the time.