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China regulator OK's lender IPO
2007-09-07
China's securities regulator said Friday it has approved an application by China Construction Bank, the nation's biggest mortgage lender, to issue shares in what could be one of China's biggest initial public offerings. The China Securities Regulatory Commission posted a notice confirming the IPO approval on its Web site. The bank plans to issue up to 9 billion yuan-denominated shares in Shanghai. Based on the bank's closing share price in Hong Kong on Friday, the IPO could raise up to 62 billion yuan (about $8 billion). The Construction Bank was the first of China's four big state banks to stage an IPO in Hong Kong, raising $9.2 billion in October 2005. But it has trailed rivals Industrial & Commercial Bank of China (ICBC) and the Bank of China in seeking a domestic share listing. ICBC netted $5.9 billion in the Shanghai segment of a dual offering with Hong Kong that raised a record total of $21.9 billion in October 2006. Bank of America Corp. holds an 8.5 percent stake in the Construction Bank, China's biggest mortgage lender. China Construction Bank reported earlier this month that its first-half net profit rose 47.5 percent to 34.2 billion yuan ($4.5 billion) from a year earlier, thanks to higher interest and fee-based income. The bank said plans to use proceeds from its IPO to build up its cash base and upgrade its services and management.
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