Caixin
Jun 28, 2019 04:58 AM
FINANCE

Jinshang Bank to Launch $435 Million Hong Kong IPO

Taiyuan-based Jinshang Bank is the only provincial government-backed city commercial bank in Shanxi province. Photo: VCG
Taiyuan-based Jinshang Bank is the only provincial government-backed city commercial bank in Shanxi province. Photo: VCG

Shanxi provincial government-controlled lender Jinshang Bank aims to raise up to HK$3.4 billion ($435 million) through a Hong Kong initial public offering (IPO), downsized from previously planned $600 million.

Taiyuan-based Jinshang Bank, the only provincial government-backed city commercial bank in Shanxi province, set the price range for its IPO at HK$3.80 to HK$3.98 a share, according to a prospectus filed with the Hong Kong Exchanges and Clearing (HKEx).

The bank plans to offer 860 million H-shares, 10% of which will be sold in Hong Kong and the rest globally. The public offering will start Friday and last till July 11. The stock will debut on the HKEx July 18.

Three cornerstone investors have subscribed for a total of $122 million of shares, or about 30% of the total offering, the bank said.

Shanxi Qin New Energy Group Co., a coal miner in the Shanxi province, and state-owned investor Taiyuan Industrial Park Investment Holdings Co. each subscribed for $50 million of shares. Chen Xing Development Holdings Ltd., a Hong Kong-listed Shanxi property developer, subscribed for $22 million of shares.

Jinshang Bank’s biggest shareholders are Shanxi State-owned Capital Investment and Operation Co. with a 28.89% stake, Shanxi Provincial Department of Finance with a 14.69% and state-owned China Huaneng Group Co. holding a 12.33% stake.

The bank said it intends to use all of the IPO proceeds to supplement capital to support future business growth.

Jinshang Bank’s bad-loan ratio, capital adequacy ratio and bad-loan provision ratio are all within regulatory requirements.

From 2016 to 2018, the bank’s capital adequacy ratio improved to 12.99% from 12.5%. Its bad-loan ratio remained at 1.87% and its bad-loan provision ratio jumped to 212.68% to 163.52%.

About a third of the bank’s loans in 2018 went to the manufacturing sector, 22% to the mining industry and 18.3% to the real estate sector. The bank said 71% of its borrowers are large and medium-sized enterprises.

As of the end of 2018, the bank had total assets of 227.2 billion yuan ($33 billion), with an annual growth rate of 14.5% in the past three years. It extended 101.6 billion yuan of loans and credits in 2018, with an annual growth rate of 21.7% in the past three years.

At a press conference Thursday in Hong Kong, bank President Tang Yiping attributed the rapid growth in loans to the industrial transformation of Shanxi province. Tang also said the bank will expand its credit support to small and micro businesses in response to the central government’s call.

Jinshang Bank disclosed in its prospectus that it had planned an A-share listing in 2012, but the uncertainties and relative lengthy vetting process made it turn to Hong Kong.

Contact editor Han Wei (weihan@caixin.com)
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