Industrial and Commercial Bank of China, the mainland's largest bank by assets, loans and deposits, today opens the retail tranche of its US$22 billion initial public offering, which is on track to become the world's largest. It is set to trump the US$18.4 billion offering by Japanese mobile-phone operator NTT DoCoMo in 1998. 'We have created a completely new ICBC to the one that existed before 1999,' when the bank began the process of restructuring, said executive vice-president Niu Ximing. ICBC is offering 1.77 billion shares to Hong Kong investors, or 5 per cent of the total offering. That will be raised to 7.5 per cent of the offering if the amount of orders exceeds 15 to 49 times the number of shares available, and to 20 per cent if the amount of orders exceeds the shares available by 100 times. Hong Kong investors have until noon on Thursday to place orders. The institutional tranche is about 10 times subscribed, attracting about US$130 billion in orders. Bank of China, which raised US$11.2 billion in June, holds the record for oversubscription at US$175.6 billion. Institutional investors in China can place orders for ICBC's A shares beginning today, while mainland retail investors will have to wait until Thursday. ICBC is selling 35.39 billion H shares, or 10.8 per cent of its enlarged share capital, at HK$2.56 to HK$3.07 each. This values the bank at 1.96 to 2.23 times this year's book value, or 1.74 to two times next year's book value. At the same time, the bank will sell 13 billion A shares, or 4 per cent of its enlarged share capital, at 2.60 yuan to 3.12 yuan each. Both the A and H shares will be priced on Friday and begin trading a week later on October 27. The sale is the first simultaneous dual listing. Merrill Lynch, Deutsche Bank, Credit Suisse, ICEA and China International Capital Corp are arranging the Hong Kong sale. Citic Securities, Guotai Junan Securities, Shenyin & Wanguo Securities and CICC will arrange the mainland offering. Bank executives said they will increase ICBC's profit growth and its loan business while enhancing the profitability of its investing and trading activities and expanding its fee-based income. 'We see these as future growth drivers that will keep shareholders,' said vice-chairman Yang Kaisheng. ICBC expects to lift net profit by 26 per cent to 47 billion yuan this year.
