Xiamen International Bank, the first Sino-foreign bank widely considered a trailblazer in China's drive to reform its financial sector, is seeking mainland approval for a listing in Hong Kong. If successful, it would be a significant breakthrough in China's financial reforms. Xiamen would be the first China-incorporated bank to be listed in the territory. Although its seven shareholders have given their blessing to the listing plan, the bank has yet to convince various central government ministries of the advantages of a flotation. The bank's management is believed to be lobbying China's bureaucracy. A banking source said: 'Although the various ministries have given their approval in principle, there are lots of details to work out.' The joint-venture bank was formed in 1985 by four shareholders, including the Hong Kong-listed Min Xin Holdings (49 per cent), the Fujian branch of the Industrial and Commercial Bank of China (ICBC) (25 per cent), Fujian Investment and Enterprises Company (16 per cent) and Xiamen Special Economic Zone Construction and Development Company (10 per cent). Min Xin, which was known as Panin Holdings at the time, contributed its capital by injecting cash as well as two entities into the bank - Macau-based Luso International Banking and a Hong Kong-based deposit-taking company, Panin International Finance Co. In 1991, three more shareholders injected capital into the bank to top up its $420 million base and give a strong boost to its plans for expansion. Asian Development Bank, Long-Term Credit Bank of Japan and the US-based Sino Finance Group made a $200 million investment for a 25 per cent stake in the bank. The holding of the original four shareholders was correspondingly diluted. Xiamen International Bank has two branches in Fuzhou and Zhuhai and a representative office in Quanzhou. Its Macau subsidiary, Luso International Banking, has 13 branches spread throughout the Portuguese enclave. The deposit-taking company, which was upgraded to a restricted licence bank in March this year, has also been renamed to Industrial and Commercial International Capital, after ICBC took up a substantial stake. The group recorded a profit of $131.1 million in the financial year to December 31 last year, an increase of 16.5 per cent compared with the same period in 1994. Its assets reached $6.96 billion. Its dividend payout ratio has been high, at about 50 per cent of its attributable profit. As such, shareholders' equity has been rising slowly, making the option of a public listing more attractive as a prerequisite for expansion. Sources said the banking group's accounting standards closely matched international levels. 'The track record of the bank dispels scepticism and confirmed that it is possible to make good returns in China's financial field,' one source said.