Factbox: China’s regional banks on IPO trail

SHANGHAI/HONG KONG (BestGrowthStock) – China’s city and rural banks are expected to enter the IPO market over the next two years, following the completion of IPOs by all of the country’s biggest national banks.

Most of these smaller banks were founded in the 1990s as farmers’ co-operatives aimed at financing projects that bigger city or national banks declined to fund.

Some have brought in strategic foreign shareholders in recent years as they prepare themselves for a listing.

Following is a brief introduction of six city commercial and regional rural banks that have already made known their intention to seek a public listing.

Bank of Shanghai

Bank of Shanghai shareholders have approved the bank’s proposal to sell up to 1.2 billion shares in a public offering on the Shanghai Stock Exchange. Headquartered in China’s financial hub, Bank of Shanghai is the country’s second-biggest city commercial bank by assets. In 2001, HSBC (HSBA.L: )(0005.HK: ), Shanghai Commercial Bank Ltd (Hong Kong) and International Financial Corp became shareholders of the bank, buying a combined 18 percent stake in the Chinese lender.

Chongqing Rural Commercial Bank (3618.HK: )

Chongqing Rural will be listed on December 16 in Hong Kong, where it is expected to raise about $1.35 billion. Based in the southwestern city of Chongqing, it has assets of over 260 billion yuan and has said it expects to see profit rise 51 percent to 2.85 billion yuan this year. It has an NPL ratio of almost 3 percent, the highest among all Chinese banks listed in Hong Kong.

Bank of Hangzhou

Bank of Hangzhou is headquartered in Hangzhou, a major Chinese city in eastern Zhejiang province. The bank has outlined its long-term strategy to become a regional bank with a strong foothold in the Yangtze River Delta region. It posted a net profit of 930 million yuan in the first half of 2010 with an NPL ratio at less than 0.8 percent, company data showed.

Bank of Jilin

Headquartered in northeastern Jilin province, Bank of Jilin made headlines earlier this year when Hana Bank, a unit of South Korea’s fourth-largest financial services company Hana Financial Group (086790.KS: ), paid $318 million for an 18 percent stake in the Chinese bank. Bank of Jilin Chairman Tian Xueren said in May that the bank has outlined a roadmap to list in three to five years.

Bank of Chongqing

Bank of Chongqing obtained shareholder approval in 2009 for a listing on the domestic A-share market. Earlier this year, local media said Bank of Chongqing had entered the pre-IPO “quiet period,” suggesting that a public offering may be imminent. Headquartered in the city of Chongqing, Bank of Chongqing posted a net profit of 876 million yuan in 2009, company data showed.

Bank of Dongguan

Headquartered in the city of Dongguan in south China, Bank of Dongguan had reportedly hired Goldman Sachs Gaohua Securities, the Wall Street bank’s Chinese joint venture, to advise on its planned initial public offering of shares in 2008.

However, the listing plan was put on hold following the global financial crisis. Local media reported earlier this year that Bank of Dongguan has restarted the IPO plan and hopes to list once the regulatory environment turns favorable.

(Reporting by Soo Ai Peng and Kelvin Soh; Editing by Muralikumar Anantharaman)

Factbox: China’s regional banks on IPO trail