Industrial and Commercial Bank of China Ltd. (ICBC), China's biggest bank in terms of assets, has singled out five underwriters for its planned initial public offering, it has announced.
The long-awaited syndicate comprises Merrill Lynch, Credit Suisse Group, Industrial and Commercial East Asia Finance Holdings Ltd., Deutsche Bank AG and an investment bank group set up by the China International Capital Corporation Ltd. and Goldman Sachs, ICBC said in a brief statement.
It did not touch on the bank's possible listing place or IPO size, but the bank is widely expected to list on the
Hong Kong stock market, following last October's 9.2 billion U.S. dollars IPO on the same market by China Construction Bank.
Earlier media reports have estimated the size of ICBC's expected IPO at around 10 billion U.S. dollars, and the bank has said it is endeavoring to go public at an "appropriate time" this year.
Last Friday's statement said the underwriting group was selected using "stringent internal assessment procedures" to help it complete relevant listing efforts.
The shortlisted investment banks have high reputations and comprehensive strengths, as well as rich experience in financing for China's state-owned enterprises and long-term friendly ties with ICBC, it said.
The Lehman Brothers Holdings Inc. will work as a financial advisor for the lender.
Foreign investors are grappling with each other for a lucrative part of the Chinese financial market -- which is due to open fully by the end of this year in line with a commitment to the World Trade Organization -- seeking to profit from capital participation and underwriting for Chinese banks.
China's banks want to establish partnerships with more sophisticated foreign rivals as a short-cut to improving business since Chinese banks piled a mountain of bad debts on the back of reckless lending to state enterprises over the past decades, analysts acknowledge.
ICBC restructured into a joint stock company in autumn 2005. In January this year, it announced a 3.78 billion U.S. dollars investment deal with Goldman Sachs Group Inc., American Express Co. and Germany's Allianz AG.
The bank now boasts 18,000 business outlets on China's mainland, serving more than 4 million enterprises and over 100 million individual clients.
Its capital adequacy ratio (CAR) - the measure of its available capital in proportion to its outstanding loans - rose to 10.26 percent by the end of 2005, already above the international requirement of 8 percent. The bank said it is targeting a rise in the index to more than 10.4 percent by the end of the year.
ICBC's non-performing loan ratio came to 4.43 percent by 2005, compared with the 1-2 percent level reported by famous international banks.
The bank aims for business profits of more than 100 billion yuan (about 12 billion U.S. dollars) for 2006, a rise from 90.2 billion yuan last year. It said it would seek to boost e-banking and fee business.
Of the other state banks, Bank of China has said it would also sell shares to private investors this year.
