Postal Savings Bank to raise up to US$4.7 billion in secondary listing as Shanghai snares the world’s third-largest fundraising of 2019

Postal Savings Bank of China plans to raise up to 32.71 billion yuan by selling between 5.17 billion and 5.95 billion A shares at 5.5 yuan each
Subscription of the shares will be postponed to November 28 from November 7, according to a Hong Kong exchange filing

IPO

Pearl Liu

Published: 12:12pm, 6 Nov 2019

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Postal Savings Bank of China, which operates the biggest branch network among the country’s state-owned lenders, said it has picked Shanghai for a secondary listing of its shares, in what would be the largest fundraising exercise on the mainland in more than four years.

The Beijing-based bank plans to raise up to 32.71 billion yuan (US$4.66 billion) through an issue of between 5.17 billion and up to 5.95 billion A shares at 5.5 yuan each, according to a stock exchange filing.

It earlier raised HK$59.15 billion from the sale of so-called H shares on the Hong Kong stock exchange in 2016, one of the biggest IPOs that year. The stock was little changed at HK$5.14 on Wednesday, having risen 24 per cent this year versus a 7.2 per cent gain in the Hang Seng Index.

The Shanghai plan could become China’s largest domestic offering since Guotai Junan Securities collected 30 billion yuan from its IPO in 2015, assuming it manages to sell the mid-point of the shares on offer. The deal would also rank as the world’s third largest this year after Uber Technologies’ US$8.1 billion listing in New York in May and Budweiser Brewing Company APAC’s US$5.8 billion IPO in Hong Kong in September.

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Postal Savings Bank, with 168,000 employees on staff at the end of June, was established as a deposit-taking subsidiary of the country’s postal service and wasn’t licensed as a bank until 2007. It serves 600 million individual customers across a network of 40,000 branches in China, from the Tibetan city of Lhasa in the Himalayas to Beijing.

The bank held 9.1 trillion yuan of savings at the end of September and gave out 4.8 trillion yuan of loans to customers. Net profit rose 16 per cent to 54.29 billion yuan in the first nine months this year from a year earlier, according to its financial report. Nearly half of its customers are located in rural China away from the biggest cities.

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Postal Savings Bank will be the 14th Chinese lenders to tap investors in both the mainland and Hong Kong stock exchanges for capital. Net proceeds from its Shanghai offering will be used to strengthen its capital base and business development, according to its filing.

Subscription for the new shares has been postponed to November 28 from November 7, it said, without giving a reason.

There were 41 stock sales on the Shanghai Stock Exchange in the first nine months this year, raising an equivalent of US$7.3 billion, according to data compiled by Refinitiv, making it the fourth best venue for IPOs this year. The bourse recorded 46 IPOs in 2018 with total proceeds of US$10.4 billion.

This article appeared in the South China Morning Post print edition as: Postal bank to raise up to HK$36b in Shanghai offer

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