(Yicai Global) June 13 -- The Postal Savings Bank of China, one of the largest consumer banks in the country, may carry out the biggest initial public offering on the mainland this year as the Hong Kong-listed firm got the first go-ahead to pursue a secondary offering.
The China Banking and Insurance Regulatory Commission gave a permit to the Postal Savings Bank to issue no more than 5.9 billion stocks on the A-share market, the Beijing-based lender said in a statement to the Hong Kong Stock Exchange yesterday. The bank still needs a confirmation from the China Securities Regulatory Commission and other authorities.
The lender raised USD7.4 billion by going public in September 2016, making it the world's largest IPO in two years.
The proceeds of the secondary offering would go to replenish the bank's capital. Its capital adequacy ratio was 13.4 percent in the first quarter of this year, less than the average of 14.2 percent that other Chinese commercial banks reported.
Despite its underwhelming capital reserves, Postal Savings Bank's operating income rose 8 percent to CNY68.5 billion (USD9.8 billion) in the first quarter. Its net profit attributable to shareholders increased 12 percent to CNY18.5 billion. The non-performing loan ratio was 0.8 percent.
The lender's tier 1 capital adequacy ratio, a measure of financial strength, was 10.7 percent, while that of commercial banks averaged at 11.5 percent. At 9.6 percent, the adequacy ratio of core capital fell 1.3 percentage point below the sector's average.
The firm's stock price [HKG: 1658] rose 0.9 percent to HKD4.4 (USD0.60) today.
Founded in 2007, Postal Savings Bank is one of the youngest large Chinese lenders. It has nearly 40,000 business outlets, serving 584 million individual customers.
Editor: Emmi Laine