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Industrial Bank sees record high subscription
(Xinhua)
Updated: 2007-01-26 15:53 Investors have forked out 1.16 trillion yuan (US$150 billion) to subscribe the initial public offering (IPO) of China's Industrial Bank, setting a new record for A-share subscription.
The figure dwarfs the previous high of 832.5 billion yuan set late December by China Life Insurance, the country's largest insurer. An Industrial Bank circular released on Friday said the IPO price for the 1.001 billion renminbi-denominated A-shares that will start trading on the Shanghai Stock Exchange on February 5 has been fixed at 15.98 yuan, the upper limit of the previously announced range. The funds will be used to boost the bank's capital adequacy ratio, strengthen its risk prevention capability and profitability and support its business development, according to bank sources. Listing on the stock market will aid modernization of the bank's management and business operations and accelerate its transformation into a modern commercial bank, said Gao Jianping, the bank's chairman. The Industrial Bank, headquartered in Fuzhou, the capital city of East China's Fujian province, is a joint venture controlled by the Fujian provincial government and the Hang Seng Bank. The Bank, formerly called the Fujian Industrial Bank, was founded in 1998. By the end of June 2006, its capital adequacy ratio was 7.17 percent, lower than the eight percent set by the China Banking Regulatory Commission. BOC International (China) Limited is the lead underwriter of the IPO. Over the last three years, the Industrial Bank has branched out into derivatives, asset trusteeship, and investment banking. Its compound annual growth rate of capital, deposits and loans are all above the industrial average. The company reported net income of 14 billion yuan in 2003, 18 billion yuan in 2004, and 25 billion yuan in 2005. Its compound annual growth rate reached 31 percent. By the end of 2006 the bank's total assets exceeded 530 billion yuan. Profits are not growing quickly enough to fuel expansion plans. A public listing is needed to raise the required capital, said the company. In 2006, China saw more banks list on both domestic and foreign markets. The Bank of China, which issued A shares, and the Industrial and Commercial Bank of China, which issued A- and H- shares, quickly became major blue chips on the domestic securities market. The Industrial and Commercial Bank of China is now the largest listed bank in Asia and the fifth largest in the world. (For more biz stories, please visit Industries)
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