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People's Daily Online>>China Business

Bank opens path to stock sale

By Gao Changxin  (China Daily)

09:41, February 28, 2012

Pedestrians walk past a branch of the Postal Savings Bank of China in Yichang city, Hubei province, on Monday. The commercial bank has finished a joint-stock restructuring and prepared for a sale of shares to the public. (Liu Junfeng / for China Daily)

BEIJING - The Postal Savings Bank of China Co Ltd, a commercial bank in China serving small business owners, said on Monday that it has finished a joint-stock restructuring and paved the way for a sale of shares to the public.

The bank, which has the reputation of being the "Chinese Wells Fargo", is a subsidiary of the State-owned China Post Group Corp, the country's biggest postal company.

China Post Group Corp is already trying to raise capital for another of its subsidiaries. The delivery company China Postal Express & Logistics Co Ltd recently filed for a listing with the China Securities Regulatory Commission and passed the commission's first round of examinations. It is likely to float its shares soon.

Analysts say completing the restructuring will bring Postal Savings Bank of China, the country's sixth largest lender measured by asset values, a step closer to listing its shares on the stock market. That, they said, makes it likely the company will file a listing application in the "foreseeable future".

Jin Lin, a banking industry analyst with the Shanghai-based Orient Securities Co Ltd, said it is completely possible the bank will go public, noting that China Development Bank, another State-owned institution, has talked about floating shares.

The Postal Savings Bank of China, once restructured, will take over all of its former self's assets, liabilities and personnel and will not trouble depositors by requiring them to follow new procedures, the bank said in a statement posted on its official website. The new entity has 45 billion yuan ($7.1 billion) in registered capital.

The restructuring is coming after the bank saw its loans increase and its capital adequacy ratio - the ratio of the bank's capital to its weighted risks - drop below the minimum level mandated by regulators.

The bank's capital adequacy ratio stood at 8.37 percent at the end of 2010, about 2 percentage points lower than the requirement of 10.5 percent. The Postal Savings Bank hasn't published its ratio for 2011 yet.

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