Executive: BOC targets IPO in 1st qtr of 2006
(bloomberg.com)
Updated: 2005-11-15 20:54

China this year attracted almost $15 billion of strategic investments for its three largest banks, a third of which was committed by Temasek, a Singapore government fund. The banks are also seeking assistance from overseas lenders to improve risk management and corporate governance.

Temasek previously invested $1.5 billion for a 5.1 percent stake in Construction Bank, the third-biggest lender, in July, and bought a further $1 billion of shares in a subsequent public offering. The company in January bought a 4.55 percent stake in China Minsheng Banking Corp., the nation's only privately controlled lender.

Foreign strategic investors won't be allowed to buy stakes in more than two lenders, Tang Shuangning, vice chairman of the China Banking Regulatory Commission, said in a speech in Beijing on Nov. 2. The government defines a strategic investment as one of 5 percent or more, he said.

The government is seeking overseas capital and expertise to help strengthen domestic banks before the industry is opened to increased foreign competition at the end of 2006. China will remove restrictions on international banks to meet World Trade Organization obligations, allowing HSBC Holdings Plc, Citigroup Inc. and other rivals to compete for $1.69 trillion of local- currency household savings.

Beijing-based Construction Bank last month raised $8 billion selling shares in Hong Kong, the world's biggest initial public offering in four years. Bank of China plans to match the size of its rival's IPO, bank President Li Lihui said on Oct. 28.