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Bank of Communications prepares for IPO
(Shenzhen Daily)
Updated: 2004-08-30 15:14

China's Bank of Communications, the country's fifth largest lender, was preparing for public listing after receiving approval from China's State Council.

The State Council, or Cabinet, had approved a plan for the bank to list the entirety of its assets.

The Shanghai-based bank's planned IPO is expected to strengthen its already-strong competitive edge in China's rapidly developing bank sector.

Bank of Communications is already a foreign-investor favorite.

The bank signed a deal to sell 19.9 percent of its equity to HSBC Holdings unit Hongkong & Shanghai Banking Corp for US$1.747 billion.

As part of its capital strengthening, Bank of Communications also received cash injections worth 18 billion yuan (US$2.17 billion) from its major shareholder, China's Ministry of Finance and other stakeholders.

Separately, China Construction Bank would launch its shareholding company next month.

China Construction Bank, one of China's big four State banks, has signaled plans to split into a "good bank" that will actually sell equity, and a "bad bank" that will retain some of the worst loans.

Bank of China, another of the country's big four State banks, officially launching its new shareholding company Thursday.

The renamed Bank of China Ltd is now on track to take on yet-unspecified foreign strategic investors and a public listing by the second half of next year, said the bank's new president Li Lihui.

Last year China dipped into its huge foreign-exchange reserves and injected US$45 billion into the Bank of China and China Construction Bank, to accelerate ongoing shareholding restructuring and raise capital-adequacy levels.

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