Luso International Bank, a Macau-based lender, is likely to be the first financial institution to launch an initial public offering in Hong Kong this year, sources say. The lender will also be the first bank in Macau to list in Hong Kong. Luso International hopes to raise up to HK$1 billion from the share offering expected in the second quarter. The bank, wholly owned by Fujian-based Xiamen International Bank, is a commercial entity with 11 outlets in Macau providing a wide range of personal banking, trade financing, consumer and corporate banking services. 'The rapidly expanding Macau economy driven by the gaming industry has created vast opportunities for Luso International, aside from tapping a higher proportion of the mortgage lending business and strengthening its presence in the credit-card sector over the past two years,' a source said. 'Luso has not participated much in the gambling sector but it is benefiting from the booming property sector and more inbound travellers from the mainland.' The expansion of the gambling sector after 2002 has led to more global gambling operators setting up business in the territory. This has helped to draw more tourists to Macau, especially from the mainland. Last year Macau received 27 million visitors while Hong Kong had 28 million. Lenders in Macau are benefiting from the gaming boom in recent years, but analysts said there was little room for local lenders such as Luso to rival mainland banking giants such as Bank of China which dominate the banking industry in the territory. Luso Bank is one of the three leading local lenders in Macau, together with Banco Nacional Ultramarino and Seng Heng Bank. The three account for less than 50 per cent of the market. 'Local banks cannot be compared with mainland lenders in Macau, which possess the resources and power of a state-owned financial institution,' said Peter Pak, vice-president with Bank of China International Research. 'They are usually acquisition targets of mainland lenders, and further consolidation within the industry is likely to happen.' In August last year, Industrial and Commercial Bank of China paid HK$4.5 billion for an 80 per cent stake in Seng Heng Bank, a Macau lender controlled by Stanley Ho Hung-sun. In October, Lawrence Ho Yau-lung's Value Convergence Holdings said it had agreed to pay HK$384 million in cash and shares for a 60 per cent stake in Macau Chinese Bank from Hongkong Chinese. Piper Jaffray is sponsoring Luso International's offering.