Postal savings Bank of China (PSBC) has received approval from Hong Kong stock exchange for the IPO, according to informed sources Bloomberg. This IPO may become the largest in the world this year — the Bank intends to raise up to $8 billion.
“Undoubtedly, this will be strictly limited sale of shares, and investors judge the Bank close to its carrying amount”, — quotes Bloomberg an analyst of Shanghai Capital Securities Corp. If Bina. The proceeds the Bank will direct on the further expansion of business, the Agency said.
PSBC can start posting next Monday, but, according to a Reuters source familiar with the plans of the Bank and interlocutors Bloomberg, the IPO will likely take place in early September. Bank spokesman in Hong Kong declined to comment.
PSBC — sixth in terms of assets the Bank of China (6.3 trillion yuan, or $1 trillion), the State owned China post (China Post Group Corp). China started privatization of state-owned banks on the stock exchanges since the mid 1990-ies, since then, the international investment banks have earned on these placements billions of dollars.
Organizers of the upcoming IPO — Goldman Sachs, Morgan Stanley, China International Capital, JPMorgan Chase and Bank of America. Financial consultant acts as the UBS Group.
IPO of Postal savings Bank looks promising other Bank placements of China, as PSBC works primarily with individuals repaying debts neater corporations. “This transaction causes quite a stir, given its size. This will be one of the largest IPO in the banking sector China, people want to participate in it”, — told Reuters a source.
Despite the high volatility in the Chinese stock market, in December last year, the PSBC has attracted $7 billion from 10 strategic investors, including UBS Group, JPMorgan, Alibaba , and Tencent. Buyers impressed with the 500-million-strong customer base of the Bank — more than the entire population of the United States. In addition, the PSBC includes the country’s largest branch network — 40057.
The Bank completed the year 2015 is 7% of th profit growth [yoy], the credit institution earned 34.9 billion yuan ($5.4 billion) in net profit. In the first quarter of 2016, the net profit grew at an annual rate of 11%, to 12.5 billion yuan ($1.9 billion), including due to the fact that the Bank reduced the amount of reserves to cover bad debts. As at 31 March, the share of problem loans in the loan portfolio amounted to 0,81% — less than half the average value in the industry, says Bloomberg.
The ratio of loans (of 2.67 trillion yuan, or $413 billion) deposits (of 6.73 trillion yuan, or $1 trillion) at 31 March amounted to only 30%, which means opportunities for further growth in lending. Total assets of the Bank amounted to 7.7 trillion yuan ($1.2 trillion).