Postal Savings Bank of China in world’s biggest IPO in two years
China's sixth-largest lender by assets has raised $7.4bn (£5.6bn) in the world’s biggest initial public offering since Chinese ecommerce retailer Alibaba’s 2014 float.
The state-owned Postal Savings Bank of China (PSBC) was priced at the lower end of expectations in Hong Kong and was heavily reliant on cornerstone investors – big buyers that get priority by promising not to sell their stakes for a six month period.
Selling to cornerstone backers can damage liquidity once the shares start trading. The stock will begin trading in Hong Kong on 28 September.
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Some $5.7bn, or 77 per cent of the shares on offer, were bought up by six state-owned investors, including a shipbuilder, a power company, and a port operator.
The tranche of shares offloaded to state-controlled backers offset what was seen as tepid demand from global fund managers and local retail investors.
Last year, cornerstone investors accounted for a record 41 per cent of all market floats in Hong Kong, buying up almost $14bn worth of the $33.6bn in shares sold through 49 new listings in the city, according to Dealogic.
The IPO puts a roughly $50bn valuation on the bank, a slight premium to its book value. The company earned $5.2bn in net profit last year, up seven per cent from the year before.
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PSBC is now the largest consumer retail bank in China when measured by outlets, boasting a whopping 40,000 branches.
The bankers running the deal – Bank of America Merrill Lynch, China International Capital, Goldman Sachs, JPMorgan and Morgan Stanley – could split $100m in fees.
The listing, in Hong Kong, is nearly double the size of the next largest this year, Denmark’s Dong Energy, which came to market in June.