China Minsheng Banking Corp, the country's first private bank, still has no timetable for listing in Hong Kong or approval to issue additional shares, hindering the bank's growth in the near term.
The Shanghai-listed lender received regulatory approval in March 2005 to sell 1.3 billion shares in a Hong Kong initial public offering.
But due to the poor market situation at that time, the bank postponed the share sale and said in February the shareholder authorization for the Hong Kong listing had expired.
Now, Minsheng is waiting for regulator approval on its plan to issue 3.5 billion pieces of additional shares, the bank's president said yesterday.
To maintain fast growth, the bank needs a cash infusion. Though it has a loan-growth rate of 59 per cent on average over the past five years, its' capital adequacy ratio, a key measure of a lender's financial strength, was 8.26 per cent as of December 31. That's near the 8 per cent regulatory minimum, and down from 8.59 per cent at the end of 2004.
"The listing depends on many factors such as the market situation and the banks' own development," said Eddie Wang, president of China Minsheng Banking Co, adding there is still no timetable for the Hong Kong listing.
Due to this situation, Minsheng Bank has taken a series of financing measures this year.
A plan to issue 3.5 billion pieces of shares got the go-ahead from shareholders in the bank's third temporary general meeting in August.
"But the plan is still waiting for approval from the China Securities Regulatory Commission," Wang said.
For the moment, retail banking and small and medium enterprises business will be their two focuses in the business, Wang told China Daily.
"Setting up more branches, promoting credit cards and online business will be the three major components of our retailing business," he added.
Wang hopes that Minsheng Bank's retailing business will account for 30 per cent of its whole business package within three years.
Currently, this figure is 15 per cent for Minsheng; the industry average is less than 10 per cent.
Wang, formerly president of HSBC's China business, took over as president for Minsheng this July. His participation was widely seen as a big boost for Minsheng's retailing business.
Meanwhile, the bank has sold more than 1 million credit cards since it issued the first Minsheng-branded card last June.
The bank signed a strategic deal with China UnionPay yesterday, a move aimed at improving services and expanding the business scope of Minsheng bank's domestic and foreign cardholders.
"China UnionPay's overseas outlets will help Minsheng to expand business globally," said a manager with the bank.
China UnionPay, the country's sole bankcard transactions operator, has extended its business to 23 countries and regions so far.
Source: China Daily