China's Huishang Bank sets price range for up to $1.3 billion Hong Kong IPO: source

Sat Oct 26, 2013 7:51am EDT
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By Elzio Barreto

HONG KONG (Reuters) - Huishang Bank Corp Ltd plans to launch its Hong Kong IPO next week, seeking to raise up to $1.3 billion to bolster its balance sheet after years of steep growth in lending, in the biggest listing of a financial firm in the city in three years.

Huishang Bank is offering 2.61 billion shares in a range of HK$3.50 to HK$3.88 each, putting the total deal value at up to HK$10.13 billion ($1.31 billion), a person with direct knowledge of the matter told Reuters on Saturday. The offer is expected to be priced on November 6, added the person, who was not authorized to speak publicly on the matter.

Huishang Bank's initial public offering will follow one by Bank Of Chongqing, which is seeking to raise up to $593 million in a Hong Kong offer. Bank of Chongqing, among several mainland Chinese lenders to tap capital markets to bolster their balance sheets, is set to price its up to $593 million IPO on October 31.

City commercial banks such as Huishang and Bank of Chongqing have grown rapidly in recent years because of consolidation in the sector, surging loan demand from small- and medium-sized enterprises and a boom in consumer finance.

China had 144 city commercial banks at the end of 2012 and combined assets worth 12.35 trillion yuan ($2.03 trillion), or about 9.2 percent of the country's total.

Chinese financial firms, including Huishang and Bank of Chongqing, are aiming to raise around $11 billion through Hong Kong IPOs between now and the first half of next year, according to Thomson Reuters estimates.

The two were among several other small and medium-sized Chinese lenders that have sought listings in Hong Kong after waiting several years for approval from the securities regulator in mainland China. Other financial firms with deals in the pipeline include China Everbright Bank, Harbin Bank, China Cinda Asset Management and Longjiang Bank.

Huishang started meeting with investors about its deal on October 21. The bank could not immediately be reached for comment.   Continued...