Huishang Bank targets US$1b IPO in Hong Kong

Huishang Bank has joined the queue of companies seeking an initial public offering (IPO) in Hong Kong while the gate for listing in the A-share market remains closed.

The Hefei, Anhui province-based bank has invited investment banks to bid for advisory roles for an IPO in Hong Kong, a Bloomberg report said yesterday, citing unidentified sources. The lender is seeking to raise about US$1 billion and planning a share sale next year, it said.

Calls to Huishang Bank's Hefei office went unanswered yesterday.

Huishang Bank shareholders approved its listing plan in 2011, while the bank targeted an IPO in the A-share market last year seeking to raise about 10 billion yuan (HK$12.56 billion). However, the China Securities Regulatory Commission has frozen IPO approvals to facilitate stricter vetting of applicants since December last year.

City commercial banks such as Bank of Chongqing, Bank of Shanghai and Bank of Dalian, which originally applied for A-share listings on the mainland, are now looking to launch IPOs in Hong Kong.

Chen Xingyu, an analyst with Phillip Securities in Shanghai, said city commercial banks on the mainland were facing increasing capital pressure, but their financial conditions were strong as most of them received local government support. "They may not be in urgent need of funds, but the problem is no one knows when the A-share IPO market will reopen," he said.