The Industrial and Commercial Bank of China (ICBC), the country's biggest lender, started consultations yesterday on the pricing of its initial public offering (IPO).

The final pricing of the shares is likely to take place on October 23, with trading starting in Shanghai and Hong Kong on October 27, the bank said yesterday in an announcement to the Shanghai Stock Exchange.

Although the bank did not indicate what they IPO price may be, analysts expect it to be between 2 and 2.6 times the lender's book value.

"The shares will probably be priced at around 2.1 times its predicted book value this year," said She Minhua, a banking analyst at CITIC China Securities.

The bank has great development potential due to its large asset scale and revenue base, said She.

Media reports said that ICBC is in talks to buy PT Bank Halim Indonesia, in a bid to expand outside the country to diversify its sources of income and improve profitability.

ICBC's share offering plan was approved on Tuesday by the China Securities Regulatory Commission, after getting the nod last week from Hong Kong market regulators.

The bank plans to simultaneously issue 13 billion A shares in Shanghai and 35.39 billion H shares in Hong Kong, it said yesterday.

If the over-allotment option, or green shoe option, is fully exercised, the total number of A shares will rise to 14.95 billion and the total H shares issued will reach 40.7 billion.

The sale is expected to be the world's largest ever IPO, surpassing a US$18.4 billion offer in 1998 by Japan's NTT Mobile Communications.

ICBC's IPO may raise anything between US$19 billion and US$21 billion.

The subscription period for institutional investors in the Shanghai portion of the IPO will take place from October 16 to 19, while retail investors will able to subscribe on October 19, ICBC said.

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