New York IPOs off cards for two China banks-paper
Sun Jan 23, 2005 09:46 PM ET
BEIJING, Jan 24 (Reuters) - Two of China's big state-owned commercial banks seeking listings as part of broad reform efforts are no longer considering floating shares on the New York Stock Exchange (NYSE), a local newspaper said on Monday.
Citing sources close to the exchange, the Economic Observer said Bank of China, the country's biggest foreign exchange lender, and China Construction Bank had abandoned plans to seek dual listings and would only float shares in Hong Kong.
Bank of China and China Construction Bank, not immediately available for comment, have not divulged the timing or venue of listings but said they hope to float shares this year.
No mention was made of the London Stock Exchange (LSE.L: Quote, Profile, Research) in the report, an exchange some analysts have said could be involved in listings expected to raise billions of dollars each.
The banks, recipients of $22.5 billion each in state funds in late 2003 to recapitalise their balance sheets and help write off bad loans, both set up joint-stock companies last year as part of their efforts to become competitive banks.
Until the capital injections, the banks' balance sheets were crippled with bad debt following previous decades of government-inspired lending decisions.
Both have been courting foreign banking giants to become strategic investors ahead of their listings.
China has long prioritised reform of its banking sector, bogged down in at least $200 billion in bad debt, but is racing to make big improvements before end-2006 when foreign banking giants gain wider access to the market, according to World Trade Organisation pledges.
© Reuters 2005. All Rights Reserved.
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