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China Minsheng Banking Corp Ltd has received final approval from the China Securities Regulatory Commission (CSRC) to issue up to 1.34 billion H shares, the bank announced in a circular published on Friday.
The CSRC approval means the bank has cleared all the regulatory reviews and application procedures in the mainland for an overseas listing.
But it still needs to get approval from the Hong Kong Exchanges and Clearing Limited (HKEx) to issue the H shares and list them on Hong Kong's main board.
Minsheng, a joint-stock bank based in Beijing and already listing A shares in Shanghai, had originally planned to realize the H share listing in 2004, but the plan was delayed due to procedural problems, including the longer-than-expected review of the transfer of some State holdings in the bank to private investors.
An official with Minsheng said on Friday that HKEx is expected to hold a hearing to handle the bank's H share issue application in accordance with the listing procedure. And with its approval, Minsheng will be able to kick off the roadshow overseas and go ahead for the H share listing.
"But the timing is not within our control," the official said.
"Everything has been progressing quite smoothly so far," he added.
If so, Minsheng is hoping to be the first mainland bank to list overseas.
Another joint-stock bank from the mainland, Bank of Communications, is also actively preparing for an H share listing. And Bank of China (BOC) and China Construction Bank (CCB), two of the Big Four State-owned banks that are heading for a public listing, are also likely candidates.
Minsheng witnessed its net profits growing by 47 per cent in 2004 to 2.04 billion yuan (US$246.3 million), according to its 2004 annual report released in February.
Its net earnings per share was 0.39 yuan (US$0.047).
The bank's total assets also rose by 23 per cent during the year to reach 445.4 billion yuan (US$53.8 billion). And the non-performing loan ratio was 1.31 per cent.
Dong Wenbiao, president of Minsheng, said earlier this month that the bank would put more focus on its retail banking business in the future.
But analysts said the bank badly needs fresh capital to support its expansion.
Another major concern is about the pricing of the expected H share issue, because the bank has already listed A shares.
There are always price gaps between two types of shares.
Fang Zichao, an analyst of CITIC Securities, said Minsheng's H share offer will bring some pressure to A share investors, but the shockwave is limited.
Minsheng's A share edged up 0.18 per cent to 5.61 yuan (US$0.68) on Friday.
(China Daily March 26, 2005)
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