The Agricultural Bank of China (ABC) announced its huge dual listing in Shanghai and Hong Kong, which could be the world’s largest-ever initial public offering, said a media report.
ABC, the biggest bank in China by customers, plans to sell as many as 22.24 billion shares through its IPO in Shanghai and another 25.4 billion shares in Hong Kong. The Beijing-based bank didn’t disclose its issue price. But, earlier media reports indicated that it could net $30 billion to rank as the biggest IPO in the world, surpassing the $22-billion sale by the Industrial and Commercial Bank of China in 2006, the Shanghai Daily reported today.
ABC is the last among China’s big four state-owned banks to follow the three-step reform — cleanup of balance sheet, attracting foreign investors and going public. Its rivals, ICBC, the Bank of China and China Construction Bank, are all dual-listed in Shanghai and Hong Kong.
ABC’s Shanghai shares will account for seven per cent of its enlarged capital, while its Hong Kong shares will account for eight per cent. Also yesterday, Rabobank Groep NV, the world’s biggest agricultural lender, said it would start a strategic partnership with ABC in wholesale banking, rural finance, asset management and leasing, as well tapping joint business opportunities.
Although ABC, with most of its business in the country’s rural areas, is less profitable than its state-owned rivals, Chairman Xiang Junbo is confident that investors will eye its 350 million customers, as the central government aims to cut the gap between affluent cities and rural areas.
Liao Qiang, a Beijing-based analyst at Standard & Poor’s, said ABC’s rural operations were not profitable yet, but he had “no doubt” that it would eventually become a stable growth engine, difficult to be matched by competitors.
Xiang, previously the deputy governor of China’s central bank, still has to persuade investors of ABC’s prospects against concerns of a double-dip recession in the global economy amid the Greece debt crisis as well as worries of a domestic stock market slide and a correction in the housing market.
