Guangzhou Rural Commercial Bank's Hong Kong Listing Swells Ranks of Domestic Farm Bank IPOs
Song Yikang
/SOURCE : Yicai
Guangzhou Rural Commercial Bank's Hong Kong Listing Swells Ranks of Domestic Farm Bank IPOs

(Yicai Global) June 21 -- Guangzhou Rural Commercial Bank Co. [HK:1551] has successfully listed its H-shares.

It is yet another rural commercial bank to list on the Hong Kong Stock Exchange following in the footsteps of Chongqing Rural Commercial Bank Co. HK:3618] and Jilin Jiutai Rural Commercial Bank Corp. [HK:6122].

Guangzhou Rural Commercial Bank official H-share listing raised net proceeds of approximately USD931 million (HKD7.163 billion) yesterday, which will go to replenish capital to support its business growth.

At full-trading day closing yesterday, Guangzhou Rural Commercial Bank's share price stood at HKD5.12, some 0.20 percent higher than its issue price.

Six mainland rural commercial banks have listed on the A-share or H-share market since last year. At least 20-plus rural commercial banks are preparing for listing as A-shares, H-shares or on the National Equities Exchange and Quotations (NEEQ), per incomplete statistics by Yicai Global.

Rural commercial banks face a higher NPL ratio than national joint-stock commercial banks or city commercial banks and bear heavy historical burdens and confront other difficulties. To cite the quality of assets as an example, at the end of this year's first quarter the NPL ratio of domestic rural commercial banks was 2.55 percent, far higher than that of large commercial banks (1.64 percent), joint-stock commercial banks (1.74 percent) and city commercial banks (1.5 percent), China Banking Regulatory Commission statistics show.

Guangzhou Rural Commercial Bank's NPL ratio is 1.81 percent, which is lower than the average of rural commercial banks nationwide, but the largest rise in the last four years occurred at the end of last year, the bank's prospectus shows.

The bank hopes via the listing to realize comprehensive adjustment and restructuring of its corporate governance framework and management system to achieve the goal of becoming a comprehensive financial holding group, its chairman Wang Jikang told Yicai Global.

A rural commercial bank is a financial organization which has undergone reorganization based on its predecessor rural credit cooperative, which is itself a local financial institution comprising local farmers, sole proprietorships and small and medium enterprises among its shareholders.

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Keywords: IPO , GRC Bank , Rural Commercial Bank