China's biggest state-owned commercial bank has
received approval for an initial public offering, the country's top bank
regulator said Tuesday, following reports the deal could raise up to US$14 billion (euro11.17 billion).
Industrial & Commercial Bank of China's IPO "has been officially approved," said Liu Mingkang, chairman of the China Banking Regulatory Commission, quoted by the official Xinhua News Agency.
The report didn't say when or where the IPO would take place or how much money it was intended to raise. But earlier reports said ICBC wants to raise as much as US$14 billion (euro11.17 billion) with a simultaneous offering on stock exchanges in Hong Kong and Shanghai.
With a successful IPO, ICBC would join other Chinese state-owned banks that have
raised billions of dollars from investors in a massive industry overhaul as Beijing prepares to open their market to foreign competitors under World Trade Organization commitments.
Bank of China, the country's No. 2 lender, raised US$11.2 billion in May with an IPO in Hong Kong that became the fourth-largest ever in the world. No. 3 China Construction Bank raised US$8 billion in the world's biggest IPO last year.
Plans for an IPO by the remaining member of the "big four" state-owned commercial banks, Agricultural Bank of China, have been delayed due to the bank's unusually large amount of bad loans.
China's state-owned banks are trying to clear their balance sheets of billions of dollars (euros) in unpaid loans after decades of being treated as a source of finance to keep state companies afloat.
ICBC and other banks have shifted loans to newly created asset management companies that try to recover money from borrowers by seizing assets or taking ownership stakes.
They also have linked up with strategic partners from the United States, Europe and elsewhere, receiving capital injections and help in launching credit cards and other products.
The government has given its banks tens of billions of dollars (euros) to replenish reserves and meet minimum capital requirements in an effort to turn them into independent, profit-driven competitors.
ICBC
received US$15 billion from the government in April, 2005, while two other banks also each received US$22.5 billion.
ICBC also has received commitments worth about US$6 billion from outside investors.
Last month, China's social security fund agreed to invest more than 18 billion Chinese yuan (US$2.25 billion; euro1.8 billion) in the bank.
That came after a foreign investment group linking Goldman Sachs Group Inc., American Express Co. and Germany's Allianz AG agreed in January to invest US$3.78 billion in the bank