Exclusive: UBS, BNP among bidders for China's Postal Savings Bank's pre-IPO stake - sources

Wed Apr 22, 2015 7:22am EDT
 
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By Denny Thomas and Elzio Barreto

HONG KONG (Reuters) - UBS UBSN.VX, Singapore's Temasek Holdings [TEM.UL] and French bank BNP Paribas (BNPP.PA: Quote) are among half a dozen preliminary bidders to buy up to a 10 percent stake in state-owned Postal Savings Bank of China (PSBC) for at least $3 billion, people familiar with the matter told Reuters on Wednesday.

China's biggest bank by outlets, PSBC has about 40,000 branches, and a strategic partnership could help foreign banks sell insurance and banking products to China's vast population.

PSBC is preparing for an initial public offering next year, which could raise around $25 billion - the record for an IPO set last year by Alibaba Group Holding Ltd (BABA.N: Quote) - China Daily reported in February. The pre-IPO stake sale is a stepping stone that would set a valuation benchmark for that offering.

The Chinese government is open to selling a bigger stake in PSBC and prefers to sell to strategic, rather than financial, investors, said one of the individuals, who couldn't be named as the process is confidential.

China has previously introduced strategic partners into its large state-owned banks before massive IPOs to bolster investor confidence and improve management best practice - though these have tended to turn into financial investments, with European, U.S. and Asian stakeholders selling up for a large profit.

The planned sale comes as Chinese bank shares have jumped by almost a quarter this year on strong demand from mainland investors, and despite China's slowing economy and the mounting bad debts of mainland banks. A Chinese banking sector sub-index .HSHFI is up 23 percent year-to-date.

BNP Paribas, Temasek and UBS declined to comment. Calls to PSBC's general office were not answered. Reuters could not ascertain the names of other preliminary bidders.

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A man pushes his bicycle past a branch of China Post's Postal Savings Bank of China in Wuhan, Hubei province May 4, 2012. REUTERS/Stringer