Bohai Bank works with partners on US$2b IPO

Business | Agencies and Avery Chen 4 Dec 2019

China Bohai Bank, a mid-sized lender part-owned by Standard Chartered (2888), has picked lead banks for a planned Hong Kong initial public offering that could raise more than US$2 billion (HK$15.6 billion), according to people familiar with the move.

The Tianjin-based lender is working with ABC International, CCB International, CLSA and Haitong International Securities Group on the share sale. The bank will probably list in the second half of next year, sources said.

Bohai Bank joins a flurry of Chinese lenders seeking to raise capital at a record pace as they grapple with rising bad loans amid the slowest economic expansion since the early 1990s.

Policymakers have called on banks to help revive the nation's growth and boost loans to China's cash-starved non-state sector, which would see them take on more risks.

Bohai Bank, with one trillion yuan (HK$ 1.11 trillion) of assets, saw its non-performing loan ratio rise to 1.84 percent by the end of 2018 from 1.74 percent a year ago, with revenue declining 8.1 percent, according to its annual report. Standard Chartered held about 20 percent in the firm as its second-largest shareholder, while local government-backed TEDA Investment owned 25 percent.

Meanwhile, Chinese artificial intelligence firm Megvii Technology has decided to postpone its Hong Kong IPO plan to 2020 as it was given additional questions by regulators, according to Reuters IFR.

Beijing-based Megvii did not win approval for its IPO at a hearing with the Hong Kong Stock Exchange's Listing Committee last month after the US President Donald Trump's administration in October barred the company from buying US parts and components without US government approval. Other concerns include current social unrest and the upcoming Christmas holiday. Sources said Megvii believes that investors usually reduce transactions during Christmas and New Year holiday.

This also came as shares of Alibaba (9988), a backer of Megvii, retreated after listing for a week. Alibaba further fell 1.48 percent to HK$192.6 yesterday, but still traded around 9.43 percent higher than its offering price.

In other IPO news, China Merchants Commercial Real Estate Investment Trust said that its retail portion has been oversubscribed, while the institutional portion of Renrui Human Resources Technology's IPO has been fully covered, according to a market source.

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