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Chinese mid-sized lender, Industrial Bank, wins record IPO subscriptions

Chinese mid-sized lender, Industrial Bank, wins record IPO subscriptions

Chinese mid-sized lender Industrial Bank attracted a record 1.16 trillion yuan (about US$150 billion; euro116 billion) in subscriptions to its Shanghai initial public offering, reflecting the current mania for Chinese stocks.
The 16 billion yuan (US$2 billion;euro1.5 billion) Industrial Bank raised in its IPO falls far short of the amounts raised by other, larger financial institutions such as China Life Insurance and ICBC. But the amount of funds chasing the shares on offer well exceeded those bigger IPOs, reflecting strong demand.
The bank said Friday that it priced its shares at 15.98 yuan (US$2.05;euro1.58) per share, the upper end of its IPO range, drawing 1.16 trillion yuan in subscriptions.
"I think it shows continuing enthusiasm for the stock market," said May Yan, banking analyst at Moody's Investors Service in Hong Kong. "On the other hand, the bank is in relatively good shape," she said.
China Life's December IPO drew 832.5 billion yuan (US$107 billion; euro82 billion) in subscriptions and raised 28 billion yuan (US$3.6 billion; euro2.8 billion). ICBC, or Industrial and Commercial Bank of China, the country's biggest lender, raised US$5.9 billion in the Shanghai segment of a dual offering with Hong Kong that raised a record total of US$21.9 billion in October.
Chinese shares rose Friday on expectations of further gains once funds flow back into the market after the subscription lock-up for Industrial Bank ends on Jan. 29.
Industrial Bank, based in the southeastern city of Fuzhou, is a joint venture controlled by the Fujian provincial government and Hang Seng Bank, a unit of British banking giant HSBC Holdings PLC. Founded in 1998, it formerly was known as the Fujian Industrial Bank.
The bank said funds raised in its IPO are intended to boost its capital adequacy ratio, improve risk controls and support its business growth and profitability.
The bank is considered relatively innovative and lacks the so-called legacy problems of debts caused by policy-driven lending faced by its bigger rivals, Yan said.
But it is dwarfed by ICBC and other larger rivals. Industrial Bank's total assets were reported at 532.6 billion yuan (US$68.5 billion;euro52.8 billion), compared with ICBC's 6.45 trillion yuan (US$829.3 billion;euro639 billion) in total assets.


Updated : 2021-04-17 07:23 GMT+08:00