China Citic Bank Corp, the mainland's eighth-largest bank by assets, opens the retail tranche today in Hong Kong for its US$5.4 billion initial public offering with a narrower price range than originally planned. Citic Bank is offering 4.89 billion H shares at HK$5.06 to HK$5.86 each and 2.3 billion A shares in the mainland market at between five and 5.80 yuan each. The ranges were tightened from HK$4.72 to HK$6.17 and 4.66 to 6.10 yuan, which would have raised US$5.7 billion. Chairman Kong Dan said yesterday the change was due to technical issues related to running a simultaneous dual share listing, and the bank's desire to leave room for investors to profit in secondary trading. Other sources said institutional investors had baulked at what they felt was a high price and placed orders only at the lower end of the original ranges. The lowered price ranges value the Beijing-based lender at 2.57 to 2.75 times book value for this year, while the original ranges valued the bank at 2.48 to 2.81 times. By comparison, Industrial and Commercial Bank of China, the largest state-owned lender, was valued at 2.23 times last year's book value when it listed in October. China Merchants Bank, the closest comparison to Citic Bank, priced its H shares at 2.4 times last year's book value when it listed in September. The institutional tranche of Citic Bank's offering, which opened on April 10, has been more than 30 times covered, according to a Reuters report. Both the retail and institutional tranches will close on Thursday and a final price will be set the following day. Trading will start in Shanghai and Hong Kong on April 27. The heavy institutional orders came despite the fact that many fund managers considered Merchants Bank, which they said had better fundamentals, as a better investment than Citic Bank. Shares in Merchants Bank have risen 15 per cent to HK$18.24 over the past seven trading days, in part propelled by an announcement on April 11 that it was getting a 905 million yuan tax break for last year. Citic Bank's non-performing loan ratio dropped 3.4 percentage points over the past two years to 3 per cent at the end of last year. It also estimated that its profit would rise by more than 53 per cent to 5.7 billion yuan this year. 'We have established a high quality corporate customer base with over half the top 500 Chinese enterprises as clients,' chief executive Chen Xiaoxian said. Citic Bank, in which Hong Kong-listed Citic International Financial Holdings and Spain's Banco Bilbao Vizcaya Argentaria have a combined 20 per cent stake, is the second mainland company to have a simultaneous listing after ICBC. The two strategic investors will spend almost three billion yuan to maintain their stakes. Japanese banking group Mizuho Corporate Bank, the state-run National Council for Social Security Fund and mainland insurer PICC Property and Casualty each took a HK$400 million stake in the mainland lender, while China Life Insurance bought HK$200 million worth of shares.