Bank of Communications hopes to raise 2.05 billion yuan (about HK$1.92 billion) by listing on mainland stock markets this year. The Shanghai-based bank, is a pioneer in mainland banking reforms and is gearing up to sell 15 per cent to the public through an initial public offering (IPO), says Xinhua news agency. Beijing sees the bank's public flotation as a big leap to beef up its banking industry and boost capital-adequacy ratios to meet international requirements ahead of expected entry into the World Trade Organisation. As a large national bank, Bank of Communications is often grouped with the four large state-owned banks - Agricultural Bank of China, Bank of China, China Construction Bank, and Industrial and Commercial Bank of China. But unlike the state banks, which are mired in bad debts, Bank of Communications is one of the more professionally managed banks. Indications are its successful listing would pave the way for listings by other larger state banks. Only regional banks Shenzhen Development Bank and Shanghai Pudong Development Bank are listed on domestic stock exchanges. China Securities Regulatory Commission (CSRC) chairman Zhou Xiaochuan, recently said banks would be given high priority as the mainland pushed more financial institutions to float on domestic stock markets. Officials believed that listings would bring into play competitive market forces for the mainland banks. It would encourage them to deploy funds sensibly and efficiently. Leading the listing charge, however, will be the smaller banks - not the four large state-owned banks which dominate the mainland's banking sector by all barometers. Following the listings of regional banks Shenzhen Development Bank and Shanghai Pudong Development Bank, Huaxia Bank - a regional bank based in Beijing - is joining the queue to sell shares to the mainland public. China Daily yesterday quoted Huaxia Bank president Lu Yucheng as saying that the bank had applied to the CSRC for listing approval and was aiming to raise up to four billion yuan in the second quarter of next year. Proceeds would be used to develop in-line and overseas businesses. It follows a plan by China Minsheng Bank, the mainland's only private bank, to raise two billion yuan. Last year, the Bank of Communications posted a net profit of 2.54 billion yuan. It had yuan deposits of 338.5 billion yuan and foreign currency deposits of US$4.73 billion. At the same time, outstanding yuan loans expanded to 243.5 billion yuan, up 13.4 per cent over the previous year and 151 per cent over 1994. Outstanding loans in foreign exchange were 2.41 billion yuan last year, up 18 per cent over 1994. In recent years, the bank has focused its operations in major mainland cities, economically developed areas and set up branches overseas. For two consecutive years the bank was selected as the best of the mainland's banks by two noted financial magazines.