Bank listing to improve efficiency, transparency
By Liu Lian (China Daily)
Updated: 2005-10-14 08:56

HONG KONG: The listing of the China Construction Bank (CCB) will help improve the bank's transparency and efficiency, said a top executive ahead of the enterprise's offering of its shares in Hong Kong.

Chairman of China Construction Bank Corporation, Guo Shuqing, is projected on screens (right) during a press conference in Hong Kong yesterday.[Reuters]

"With our scale and capital, enhanced risk management, cost-efficient operations and strategic partnership with the Bank of America, we want to become a world-class bank by providing the best service to our customers and maximizing shareholder value with a first-class team," said Guo Shuqing, chairman of CCB, yesterday.

He also said the bank's senior managers, most of who were former government officials, will "keep studying" to press ahead with CCB's internal reforms to make the bank more market-orientated.

"CCB has a long way to go (in terms of management mode)," said Guo, adding he would also learn from other banks. For example, he said, the Industrial and Commercial Bank of China's online banking operations and the Bank of China's experience in the foreign exchange business are good reference points for CCB.

The CCB, China's largest property lender, also announced details of its listing at the Hong Kong Stock Exchange yesterday.

The bank said it intends to sell 26.486 billion H shares through the global offering, in which 1.32 billion shares, or 5 per cent, will be offered to retail investors in Hong Kong with the rest for international offering, including some to CCB's strategic investors.

Its retail tranche of IPO will be launched today and it will begin to trade its shares on October 27.

The bank priced the IPO at a range between HK$1.90 (24 US cents) and HK$2.4 (31 US cents) per share. The total proceeds of the global offering are expected to be between HK$50.3 billion (US$6.45 billion) and HK$63.6 billion (US$8.15 billion) if the over-allotment option is not exercised and between HK$57.9 billion (US7.42 billion) and HK$73.1 billion (US$9.37 billion) if the option is fully exercised.

The lender is expected to attract a huge flow of retail investors in Hong Kong, who are anxious to subscribe to the largest IPO of this year.

"We believe there will be lots of subscribers queuing up at prospectus distribution centres across Hong Kong," said Gary Li, a PR spokesman for CCB.

The Bank of Communications (BoCom) was the first mainland bank to be listed overseas. Its shares were subscribed to more than 200 times earlier this year.

According to CCB's prospectus, the proceeds of the IPO will be used to strengthen the company's capital base to support growth.

The listing has been ranked the largest ever launched by a mainland firm. Both the bank and underwriters have expressed their optimism and confidence in the process as well as in the group's future performance.

Crawford Jamieson from Morgan Stanley said: "I have confidence in the bank. I have seen its prosperity from the dynamic management." But he refused to comment on whether CCB's IPO would be more heavily subscribed than BoCom's.

Other foreign investors including the Bank of America Corp and Singapore's Temasek Holdings are also poised to place big orders in the IPO.

One of the largest commercial banks in China, CCB has around 14,250 branches. It has a nationwide base of approximately 68,000 corporate loan and discounted bill customers, and approximately 146 million active personal deposit accounts.

CCB provides a comprehensive range of commercial banking products and services such as corporate banking, personal banking and treasury operations. It is considered one of the largest lenders of infrastructure loans among domestic commercial banks, with a 27.7 per cent market share.

CCB is also the largest lender of residential mortgage products and the second largest issuer of bank cards.

(China Daily 10/14/2005 page9)