Bank of Beijing turns cautious on HK listing

PUBLISHED : Saturday, 12 April, 2008, 12:00am
UPDATED : Saturday, 12 April, 2008, 12:00am

Bank of Beijing, the country's biggest city lender, is turning cautious in its preparation for a public share offering in Hong Kong due to uncertainties caused by the United States subprime crisis and the mainland's tightening monetary policy.

Bank of Beijing, of which Dutch financial group ING holds 16.07 per cent, refused to give a timetable for the Hong Kong offering yesterday.

'It remains our hope to list in Hong Kong stock market,' chairman Yan Bingzhu told reporters in Hong Kong. 'But we have to put it in an objective perspective, taking into account the US subprime crisis and the tightening policy in the mainland.'

Bank of Beijing is the third of the country's 113 city commercial banks to go public, selling 15 billion yuan (HK$16.73 billion) of shares in an initial public offering in Shanghai in September last year.

The lender had planned to list simultaneously in Shanghai and Hong Kong, but the plan was scrapped because of regulatory hurdles.

Smaller rivals such as Bank of Nanjing and Bank of Ningbo raised a combined 11.1 billion yuan in domestic public offerings in July last year.

With the benchmark Hang Seng Index down 17.8 per cent in the first quarter after climbing 37 per cent last year, several key mainland enterprises have postponed their planned listing in Hong Kong.

In February, China Pacific Insurance, the mainland's third-largest insurer, delayed plans to raise roughly US$4 billion in a Hong Kong share sale due to poor investor sentiment.

'It's not urgent for Bank of Beijing to seek a listing in Hong Kong, since it had already raised sufficient capital in Shanghai last year,' said Ivan Li Sing-yeung, an analyst at Kim Eng Securities.

Bank of Beijing's capital adequacy ratio rose to 20.11 per cent at the end of last year from 12.76 per cent a year ago, way above the regulatory minimum of 8 per cent.

Net profit rose 57 per cent last year as the nation's fastest economic growth in 13 years boosted demand for corporate loans and mortgages.

Lending grew 21 per cent to 157 billion yuan last year and deposits increased 11 per cent to 260 billion yuan. The bank aims to boost profit by 40 per cent this year and expects loans will rise 20 per cent.

Yan Xiaoyan, the president of Bank of Beijing, said ING was interested in restoring its stake to 19.9 per cent. The lender's listing diluted ING's stake to 16.07 per cent.

Bank of Beijing now has 131 branches in the capital, where it is headquartered. It also has branches in Tianjin, Shanghai and Xian.