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China's Top Bank Reportedly Plans IPO

October 09, 2006|From Times Wire Services

China's biggest bank by assets, Industrial & Commercial Bank of China Ltd., plans to raise as much as $19.1 billion in what would be the largest initial public offering ever, four people involved in the sale said.

At that amount, the IPO would exceed the $18.4 billion that Japan's NTT DoCoMo Inc. raised in 1998.

Chinese banks, including China Merchants Bank Co. and China Construction Bank Corp., have attracted $27.7 billion from share sales in the last 15 months. Shares of Shanghai-based Bank of Communications Co. have more than doubled in price since its IPO in June 2005.

"People buy Chinese banks because they're optimistic about the wider economy, not because they have any individual allure," said Pauline Dan, who helps manage $1.5 billion at Manulife Asset Management in Hong Kong.

ICBC is planning the first-ever dual listing in Shanghai and Hong Kong. In Hong Kong, Beijing-based ICBC plans to offer 35.4 billion shares at 33 to 39 cents apiece, said the people, who asked not to be identified before a formal announcement.

ICBC's simultaneous offerings would eclipse the $13.7 billion that Bank of China raised in two sales this year. Shares reportedly are scheduled to start trading Oct. 27.

The bank received a $15-billion bailout from the government last year that helped it reduce bad loans, and this year it sold a 10% stake for $3.78 billion to a group including Goldman Sachs Group Inc.'s GS Capital Partners V fund, Allianz and American Express Co.

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