ABC Launches Dual Listing

Braving the world's weak stock markets, China's third largest bank by assets is probably making history

Agricultural Bank of China, the third largest bank by assets in China, has launched a mega-initial public offering in Shanghai and Hong Kong. The Beijing-based lender has raised about US$ 19.2 billion in what could be the largest IPO in history.

In an interview with Caixin, ABC chairman Xiang Junbo attributed the sucess of the IPO to China's urbanization process, which helped attract institutional investors. Xiang also said his job in orchestrating the IPO as his most demanding ever. "It is hard to train a gigantic elephant," he joked.

The opening price on the first trading day in Hong Kong was 3.25 yuan per share, 1.56 percent higher than the IPO price of 3.20 yuan. ABC Chairman Xiang Junbo said that he was satisfied with the opening price considering weak markets across the world. ABC’s H-shares were oversubscribed by 4.87 times, the lowest among eight Chinese banks listed in Hong Kong. ABC’s A-shares were launched in Shanghai on July 15.

ABC expects to record 46 billion yuan in net profits for the first half of this year, up 40 percent compared with the same period of 2009, according to the Beijing-based lender. In 2009, annual net profits reached 65 billion yuan, up 26.3 percent from 2008, due to an increase in commission and service fees. Total assets of ABC reached 8.88 trillion yuan at the end of 2009, said the lender's financial report released July 13. Its deposits reached 7.5 trillion yuan and total loans were 4.14 trillion yuan at the end of 2009.

The bank's capital adequacy ratio was 10.07 percent and non-performing loan rate was 2.91 percent, according to the annual financial report.