Seventeen of China’s Regional Banks Could Raise $14bn Via IPO’s

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Seventeen of China’s regional commercial banks have applied with the securities regulator for initial listings that could collectively raise as much as USD$14 billion .

The number of companies awaiting approval from the China Securities Regulatory Commission for listing was 300 at the end of May, as compared to 674 in January.

These companies include 17 Chinese banks, of which 16 have already passed the opening stage of approvals.

According to The Financial Times the total amount of funds raised by the 17 lenders is expected to be between 40 billion and 90 billion yuan ($6 billion to $14 billion).

Given that China’s biggest commercial banks are already listed, the cohort of lenders awaiting IPO’s consists mainly of municipal and rural banks, who have undertaken aggressive fund-raising drives over recent years in order to satisfy Basel III requirements for capital adequacy.

Analysts expect demand for bank shares to be lacklustre however, given signs of a slowing Chinese economy. Shares in Chinese banks are currently trading at their lowest valuations in nearly a year in terms of price-earnings ratio.

Banks applying for listing on the Shanghai Stock Exchange include Bank of Changsha, Weihai City Commercial Bank, Bank of Xi’an, China Zheshang Bank, Xiamen Bank, Xiamen Rural Commercial Bank, Chongqing Rural Commercial Bank and Yaodu Bank.

Those apply for listing in Shenzhen include Bank of Zhengzhou, Bank of Lanzhou, Bank of Ruifeng, Qingdao Rural Commercial Bank, Bank of Suzhou, Bank of Qingdao, Jiangsu Dafeng Rural Commercial Bank and Maanshan Rural Commercial Bank.

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