A man pushes his bicycle past a branch of China’s Postal Savings Bank. The lender’s recent announcement is seen by analysts as a bid to improve its corporate governance. (Photo : Reuters)
Postal Savings Bank of China (PSBC) announced plans to raise up to $25 billion with an initial public offering in 2016, making it the latest of China’s biggest banks to seek funds in the equity market.
The bank has also received approval from the Ministry of Finance, said the source who refused to be identified.
"By floating the bank on the stock market, we look forward to improving its corporate governance structure through the diversification of equity ownership," he said.
With over 40,000 branches across China and with total assets surpassing 5.58 trillion yuan ($891.69 billion) as of 2013, PSBC is wholly owned by China Post Group Corp., the state-owned postal service provider.
In a report from state-sanctioned China.org.cn, PSBC is introducing investors as part of the government's plans to diversify the equity ownership of the SOEs in a bid to improve returns on state capital.
The report also added that the bank also intends to strengthen its capital to meet the demands of development.
"As the bank's loan-to-deposit ratio is just 30 percent, there is still much scope for credit growth, but that requires an injection of capital into the lender. Its senior executives hope to establish a long-term source of capital injections by introducing strategic investors and obtaining a listing on the stock market," the source said.
Earlier on Monday, the PSBC entered talks with prospective investors to sell minority stakes before its IPO, which included Zhejiang Ant Small & Micro Financial Services Group Co., an affiliate of the e-commerce giant Alibaba Group.
PSBC's parent company China Post also entered a strategic agreement with Alibaba in June the previous year regarding the joint development and cooperation on new businesses and markets.
