Chinese bank raises over $19 billion in IPO

Mumbai: In the largest-ever initial stock offer, China's biggest bank, the Industrial & Commercial Bank of China, raised at least $19.1 billion in a dual listing on the Hong Kong and Shanghai stock exchanges.

The previous record was a $18.4-billion initial stock offer by Japanese mobile phone company NTT DoCoMo in 1998.

The IPO of about 50 billion shares at 39 cents each attracted about $500 billion in orders. Analysts had expected the stock sale to rise to $21.9 billion — with $16 billion raised in Hong Kong and $5.9 billion in Shanghai.

In Hong Kong, shares of the Beijing-based ICBG rose 14.6 per cent from their initial offer price but in simultaneous trading in Shanghai, shares closed just 5.1 per cent higher.

China is trying to prepare its top domestic banks to battle global majors like Citicorp and HSBC. Last year, two of the country's other big four banks — China Construction Bank and Bank of China - attracted billions of dollars in IPOs. They have also seen a rise in their stock prices over the year.

Industrial & Commercial Bank of China is the largest of the country's big four state-owned banks. The IPO accounts for about 15 per cent of ICBC's total shares. The government controls 72.5 per cent of the bank's stock, with the rest in the hands of China's national pension fund and a group of foreign strategic investors, including Goldman Sachs Group and American Express Co.

As of June 30, ICBC had assets of $893 billion, about 18,000 branches and a workforce of 360,000. The bank, established in 1984 had 150 million individual customers and more than 2.5 million corporate clients in 2005.

The IPO, while bolstering ICBC's capital adequacy, is also expected to bring in more accountability and help introduce international standards of operating and reporting.