Postal Savings Bank Plans Biggest China IPO Since 2015 Stock Rout

(Bloomberg) -- Postal Savings Bank of China Co. is poised for the country’s biggest initial public offering since 2015.

The Beijing-based lender, which is already listed in Hong Kong, plans to raise 28.4 billion yuan ($4.1 billion) in what would be the world’s third-largest listing this year behind Uber Technologies Inc.’s $8.1 billion share sale in May and Budweiser Brewing Co.’s $5.8 billion IPO in Hong Kong in September.

One of China’s largest state-owned lenders, Postal Bank plans to issue 5.17 billion A-shares at 5.5 yuan per share, according to its Shanghai stock exchange filing Wednesday, which confirmed an earlier Bloomberg report.

If the bank fully exercises an over-allotment option of up to 776 million shares, the fundraising size may reach as much as 32.7 billion yuan, surpassing Guotai Junan Securities Co.’s 30 billion yuan offering in 2015. In doing so it would become the largest A-share listing since Agricultural Bank of China Ltd.’s 68.5 billion yuan offering in 2010, according to data compiled by Bloomberg.

The country’s banks are boosting capital at a record pace, mostly through debt sales, to beef up financial strength as they grapple with rising bad debt. Policy makers have also called on lenders to help revive its economic growth and increase loans to China’s cash-starved non-state sector, which would see them take on more risk. China’s equity financing market is heading to the first increase in volume this year since 2016.

Postal Bank has more than 40,000 outlets nationwide and over 550 million retail customers. The stock has gained 25% in Hong Kong this year. The A-share offer price represents a premium of about 19% to Wednesday’s close of HK$5.16 in Hong Kong. The stock rose 1.2% on Wednesday.

Subscription was postponed to Nov. 28, from the original date of Thursday. China requires companies that price their shares above industry average to file risk warnings to investors for three weeks.

--With assistance from Fion Li and Philip Glamann.

To contact Bloomberg News staff for this story: Ken Wang in Beijing at ywang1690@bloomberg.net

To contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, David Watkins, Kevin Kingsbury

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With assistance from Bloomberg