Municipal Banks with Ballooning Balances Queue Up for IPO’s

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Chinese banks with ambitions to go public have posted surging growth in both assets and net earnings last year.

The latest data from the China Securities Regulatory Commission indicates that a total of 12 Chinese banks are in the waiting line for listing on either the Shanghai or Shenzhen stock exchanges.

In addition to being established municipal lenders, Securities Daily points out that many of the banks with listing aspirations saw surging growth in their balance sheets last year.

Bank of Qingdao saw total assets surge by over 48% last year to reach 277.988 billion yuan, while Bank of Zhengzhou and Bank of Changsha saw gains of  37.84% and 33.93% respectively, with their balance sheets hitting 366.1 billion yuan and 374.7 billion yuan.

Other banks that have seen sizeable total asset increases include Jiangsu Zijin Rural Commercial Bank, which posted an increase of 31.45% to reach 133.803 billion yuan, and Weihai Commercial Bank, which saw growth of 23.18% to reach 186.34 billion yuan.

While earnings levels were more variable amongst these banks, five Chinese lenders planning IPO’s reported double digit net profit growth last year.

These include Zijin Agricultural Bank, which reported a year-on-year increase in net profits of 23.04% last year to hit 1.033 billion yuan; Bank of Zhenghzhou with an increase of over 20% to reach net profits of 4.045 billion yuan and Bank of Changsha, whose 17.47% increase took net profits to 3.252 billion yuan.

Performance on the assets front was more ambivalent, with five of the banks applying for IPO’s reporting increases in non-performance loans, including Bank of Zhengzhou, Bank of Harbin, Weihai Commercial Bank, Bank of Xi’an and Bank of Suzhou.

All of these banks nonetheless claim that NPL’s are below 2%, and that gains were only a fraction of a percentage point.

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