5.17 billion yuan would help develop platforms, optimize firm’s structure
Hong Kong-listed Postal Savings Bank of China, the largest lender by number of branches on the mainland, said it plans to raise some 5.17 billion yuan ($785 million) through listing in Shanghai Stock Exchange.
The listing, if successful, will help to develop the lender’s domestic and global financing platforms and optimize its corporate governance structure, according to the bank.
The lender raised $7.4 billion through listing in Hong Kong last year, becoming the world’s biggest IPO since internet giant Alibaba was listed in New York in 2014.
The bank reported first-half net profit of 26.6 billion yuan, up 14.5 percent year-on-year, and first-half revenue of 105.97 billion yuan, up 13.6 percent.
By the end of June 2017, the lender’s asset size was 8.54 trillion yuan, 3.37 percent year-on-year increase.
The lender is the mainland’s sixth largest bank by asset size, and the largest one by number of branches as it reaches to counties and villages to facilitate financial services in rural areas across the country.
By the end of June 2017, the bank had personal accounts of 539 million with a total lending balance of 1.79 trillion yuan, 13.26 percent more than that of the end of 2016.
Analysts said that Postal Savings Bank of China has a stable income and profit model, which mainly focus on interest margin growth. Its asset quality is relatively healthy.
“But in a fast changing world with more diversified demands, the bank needs to make more innovations in products offering and services,” said a research note by Orient Securities.
Fitch Ratings’ rating for Postal Savings Bank of China is “A+” for long-term, outlook stable, which is also among the highest ratings for all rated lenders in China.
The entire banking sector in China has been experiencing rising pressure from profitability management, risk management and tightened regulation.
According to a report by KPMG on the banking sector in China, banks have been increasingly using financial technologies to reduce operation cost, and developing more fintech products and services to expand profit margin in a bid to offset the negative impacts of shrinking interest margin.
Influenced by the positive sentiments after the lender announced the plan for listing in Shanghai, share price went up 3 percent on Wednesday to HK$4.8 (0.61 cents).