Guangzhou Rural Commercial Bank expects to raise US$1.1b at IPO ‘to bolster balance sheet’
Guangzhou Rural Commercial Bank says it will price its IPO on or around June 13, in a share sale expected to raise US$1.1 billion
Guangzhou Rural Commercial Bank (GRCB), China’s fifth largest rural commercial bank by assets, says funds raised at its upcoming initial public offering in Hong Kong will boost its balance sheet, adding that it expects a broadening economic recovery in China.
The state-backed lender, located in the most prosperous province of China, is seeking to raise US$1.1 billion from its Hong Kong IPO in what is tipped to be the biggest bank listing in the city since last September, when China Postal Savings Bank raised US$7.32 billion.
The move comes at a time when an economic slowdown, highlighted by a series of closures by state-owned firms, has seen Chinese banks scramble to bolster their balance sheets and mitigate credit risks.
“As the country shows signs of an economic rebound, we are hopeful that our business environment will be stable and our balance sheet will be much stronger after the public listing,” said Peng Zhijun, vice president and chief risk officer with GRCB.
China’s five largest banks reported better-than-expected figures for non-performing loans during the fourth quarter, helped by improved macroeconomic conditions.
Yet analysts caution the country’s rural commercial lenders are subject to bigger risks on the grounds that they often deal with smaller borrowers.
