China bank PSBC files for 2016's biggest IPO: Report

 One of China's biggest banks hopes to raise $8 billion by listing in Hong Kong, in what would be the world's biggest flotation this year, a report said today.

AFP| Last Updated: Jul 01, 2016, 16:12 PM IST
China bank PSBC files for 2016's biggest IPO: Report

Shanghai: One of China's biggest banks hopes to raise $8 billion by listing in Hong Kong, in what would be the world's biggest flotation this year, a report said today.

Postal Savings Bank of China (PSBC), the country's sixth-biggest lender with 40,000 branches – more than any other bank in the country – aims to list in the city as soon as September, Bloomberg News said.

The bank – founded in 2007 in an effort to boost financial services in rural areas – had as of last September total assets reaching 6.8 trillion yuan (now $1.0 trillion) and served nearly half a billion customers, according to its website.

If successful the initial public offering would be the world's biggest since Chinese Internet giant Alibaba's 2014 listing in New York, which raked in $25 billion, according to Bloomberg.

An analyst said the flotation could boost the bank's capital levels and improve management, but warned that reform would be difficult.

"PSBC has heavy baggage and its bank 'gene' is weak," Dong Ximiao, senior economist at China's Renmin University, told AFP. "The task is heavy and the road is long for its reforms," added Ximiao.

"The more than 40,000 branches is its advantage, but at the same time, these big inefficient networks are also a big burden," Dong said.

The Hong Kong exchange was closed for a public holiday today.

Ahead of the flotation, the Beijing-based lender has sold a one-sixth stake for more than 45 billion yuan to strategic investors including Tencent, UBS Group, Singapore's Temasek Holdings, and Ant Financial, which is linked to Alibaba.