Bank of Qingdao Co., a 19-year-old commercial lender based in eastern China, is planning to raise up to US$700 million in a Hong Kong initial public offering in the fourth quarter.
The planned listing comes as shares of Hong Kong-listed Chinese banks have risen after China cut benchmark interest rates three times in the past six months.
Shares of China’s largest bank, Industrial and Commercial Bank of China Ltd., are up 19 percent this year and are trading at 1.11 times forecast 2015 book value. the Wall Street Journal reported Wednesday.
That compares with a price below book value a year ago, according to S&P Capital IQ.
China Construction Bank Corp. is up 24 percent this year and trades at 1.12 times this year’s forecast book value.
Market sentiment in Hong Kong has turned positive this year, with more than 90 percent of new listings, which makes it the top global listing venue this year, trading above their IPO price, the report said.
Bank of Qingdao would be the sixth Chinese bank to go public in Hong Kong since October 2013.
Those banks, which include Everbright Bank Co., Huishang Bank Corp. and Bank of Chongqing Co., raised a combined US$7.8 billion in the past two years, according to data provider Dealogic.
Chinese banks have been raising money amid tighter regulatory requirements and rising bad loans, coupled with a slowing economy.
Founded in 1996, Bank of Qingdao provides commercial and personal banking services.
Italian bank Intesa Sanpaolo S.p.A is its single largest shareholder with a 20 percent stake.
Qingdao Guoxin Industry holds 17.1 percent
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