China regulator approves Everbright Bank IPO plan

The decision by the China Securities Regulatory Commission — announced late Monday — comes as state-owned banks seek to raise billions of yuan to meet increased capital requirements following a lending binge in 2009.

Mid-sized lender Everbright plans to issue up to 6.1 billion shares at the Shanghai listing, according to the draft prospectus for the initial public offering.

If over-allotment options are exercised, Everbright could issue up to seven billion shares.

Everbright said earlier it had set aside three billion shares — nearly half the offering — for strategic investors.

It has also scaled back the offering from the originally planned 10 billion shares amid concern about the impact on the sharemarket.

Large fundraising plans by banks have been blamed for weighing down the Chinese sharemarket in 2010. The market has been one of Asia's worst performers, dropping 21 percent so far this year.

Everbright plans to launch the share sale in August, Dow Jones Newswires said last week, citing an unnamed source.

Everbright is the latest Chinese bank to seek to raise money from investors after the government ordered lenders to increase their capital reserves amid fears of an explosion in bad debts after record lending last year.

Earlier this month, Agricultural Bank of China, the last of the “Big Four” state banks to go public, raised at least US$19.2 billion in one of the world's largest IPOs in a dual listing in Shanghai and Hong Kong.

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