China’s Fifth-Largest Bank Makes Mainland Debut

State-owned lender Postal Savings Bank of China Co. Ltd. debuted Tuesday on the Shanghai Stock Exchange in the largest IPO on the A-share market since 2010.

The bank’s shares opened at 5.6 yuan (80 U.S. cents) and closed at 5.61 yuan, up 2% from its offering price of 5.5 yuan per share. There was active trading of the lender’s shares, which had a turnover rate of 54.45% and a total trading volume of 9.05 billion yuan on the day.

The listing was the bank’s second following its Hong Kong debut in 2016. The offering, which raised 28.45 billion yuan, was met with low retail demand, as it was 79.42 times oversubscribed by individual investors — a relatively low level for the A-share market, according to the bank’s filing (link in Chinese) to the Shanghai Stock Exchange. The bank has an overallotment option that allows it to ultimately raise the offering to a total of 32.71 billion yuan, according to the filing.

The bank’s parent, China Post Group Corp., plans to increase its holding in the lender by at least 2.5 billion yuan during the 12-month period following the Shanghai listing, according to the bank’s filing (link in Chinese). This was widely interpreted by the market as a move to prevent the bank’s stock price from dropping below the IPO price.

Some banks that have gone public over the last few months have seen their share prices dip below their IPO prices of late. Shares of Chongqing Rural Commercial Bank Co. Ltd., which debuted in Shanghai in October, finished trading Tuesday at a price 10.6% lower than its offering price. China Zheshang Bank Co. Ltd., which went public in November in Shanghai, saw its share price close at 4.58 yuan on Tuesday, which was 7.29% below its offering price.

At the end of September, Postal Savings Bank had 10.11 trillion yuan in total assets, up 6.25% from the end of last year, making it the fifth-biggest bank by assets on the Chinese mainland, its third-quarter report shows.

Contact reporter Timmy Shen (hongmingshen@caixin.com, Twitter: @timmyhmshen) and editor Michael Bellart (michaelbellart@caixin.com)

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