Bank of China (HK) to be listed in Hong Kong

Bank of China (Hong Kong) Ltd (香港中國銀行) will list on the Hong Kong Stock Exchange on July 25, the bank said yesterday, although plans for a dual public float in New York have been temporarily shelved.

Speaking at a press conference to announce the bank's initial public offering (IPO), Chief Executive Liu Jianbao (劉金寶) said the Hong Kong arm of the leading state-owned Chinese bank intended to sell up to 25 percent of the company's stock through the share offer.

The indicative price range for the institutional offering of approximately 2.6 billion shares has been set at HK$6.93-HK$9.50 (US$0.89-US$1.22) for institutional investors, he said.

"We plan to offer an incentive to retail investors in the form of a five percent discount to the institutional offer price," Liu said.

The bank will only sell existing shares for the IPO, and will not issue new shares, it said.

Standard Chartered Bank will become a strategic investor through the initial public offering, paying US$50 million for less than a 2.5 percent stake in Bank of China (Hong Kong).

Its stake is dependant on the price of the offering and whether the full allotment of 25 percent of Bank of China's (Hong Kong) shares are sold.

"While we compete in some areas, our two banks have been good friends for a long time and we intend to explore areas of potential strategic cooperation with Standard Chartered Bank," said Bank of China chairman Liu Mingkang (劉明康).

The bank will commence two-week long marketing activities for international investors tomorrow, and will announce the issue price on July 14.

Initially, 90 percent of the share offer will be earmarked for private placement, with the remainder for retail investors.

Trading in its shares will commence on July 25, it said.

However, a planned dual listing in New York had been put on hold indefinitely.

"We considered very carefully our listing options, including in the US.

But the Bank of China has its home in Hong Kong and we think it is right to list in the Hong Kong market," said Liu Mingkang.

One factor which had swayed the bank had been the stringent listing requirements in the US "which would have required a lot of hard work", he admitted.

However, Liu denied the delay was due to "earlier media reports" that suggested its original plan for a September listing had been due to instability on global financial markets following the terrorist attacks in the US in September last year.

The bank merged its Hong Kong branch, seven subsidiary commercial banks registered in China and two units registered in Hong Kong last year, to become one of the territory's largest banking groups.

After the merger, the bank cut its staff to the current 13,427 from 14,480 in 2000. On listing, the bank will become the territory's second-largest listed bank on assets behind HSBC.