Shengjing Bank Might Take the Lead of City Bank IPO

Shengjing Bank, based in the northeast Chinese city Shenyang, is expected to be the first among Chinese domestic city lenders to get listed.

As the biggest city bank in Northeast China, Shengjing Bank by December 2009 had total assets of CNY 157.9 billion, capital adequacy ratio of 12.01% and the non-performing loan ratio of 0.94%.

In addition to Shengjing Bank, such lenders as Bank of Shanghai, Bank of Dalian, Bank of Hangzhou, and Bank of Chongqing are all queuing up for launching listings. Some other city Banks of China are also eager to launch IPO sooner or later. Bank of Guangzhou is planning to bring in financial and strategic investors, to pave the way for getting listed in three years. According to the lender, it is to bring in qualified domestic or foreign institutions as the financial investors, no matter they are securities brokers, state-owned enterprises, trust and investment firms or insurance companies. Bank of Jinzhou, a city bank based in northeast China, prepares to apply to China Banking Regulatory Commission for going public. By the end of this June, the bank took in total deposits of CNY 54.8 billion, up 23.3% compared to the figure at the yearend of 2009; while it offered total loans of CNY 36.1 billion, up CNY 4.94 billion from last yearend. Based in Tianjin, China Bohai Bank has set the goal to become a publicly-traded lender in due time from 2011 to 2015. The northern provincial-level city-based lender attaches much importance to economically developed Guangzhou and Shenzhen. In the coming five years, the bank has the plan to acquire or merge smaller lenders.

Out of the consideration for regional balance, the securities regulator is understood to give priority for city Banks in northeast or northwest China to get listed ahead of other peers. Of course, there would be some uncertainties.

As required by relevant regulatory departments, the stock ownership of internal employees of a listed city bank shall not exceed 10% of the lender’s capital stock and such ownership shall not exceed 500,000 publicly-traded shares for a single employee. By the yearend of 2009, Bank of Shanghai had 40,064 shareholders; Bank of Dalian had 5,219 shareholders; Bank of Hangzhou had 1,827 shareholders and Bank of Chongqing had 3,345 shareholders. Natural persons’ shareholding proportions in Bank of Dalian, Bank of Hangzhou, Shengjing Bank and Bank of Chongqing stood at 11.79%, 11.75%, 3.59% and 2.81% respectively.