Local banks march to Hong Kong
Three regional lenders are moving ahead with Hong Kong IPO plans due to a need for cash, but may be forced to scrap their plans if sentiment doesn't improve
The ongoing cash crunch at Chinese banks may be partly behind reports that a trio of regional banks are aiming to make IPOs in Hong Kong, with Bank of Shanghai, Huishang Bank and CGB all aiming to list in the second half of the year. These regional lenders may also be losing patience while waiting for China to lift a freeze on new IPOs that dates back to last year, which has led to a backlog of dozens of companies that want to make offerings. The China Securities Regulatory Commission (CSRC) had been giving signals that it could soon lift the freeze, though it may change its mind if the current sell-off on Chinese stock markets continues.
These Chinese regional lenders are among some of China's more dynamic banks, with less bureaucracy than the big national behemoths like ICBC (1398.HK; Shanghai: 601398) and China Construction Bank (0939.HK; Shanghai: 601939). But their smaller size and more regional focus often means these regional players lack the connections needed to get priority for listings on China's stock exchanges, which is why many remain unlisted to date.