China Minsheng Banking Corp, the country's first privately-controlled national joint stock commercial bank, is waiting for final approval from the Hong Kong Stock Exchange for an overseas listing.

The Shanghai-listed bank said in a statement that the Hong Kong exchange held a meeting on June 2 to vet its application.

Three months ago, the bank was given the green light by the China Banking Regulatory Commission to sell 1.3 billion shares in Hong Kong, which is expected to raise US$880 million at a price of HK$5.28 apiece.

Minsheng plans to complete the share sale by the end of September, according to a Bloomberg report.

However, a senior Minsheng official reached by China Daily yesterday declined to reveal the timetable or any other details of the listing.

But he did say the share sale is mainly to support Minsheng's fast expansion.

"We have got regulatory approval to open two to three branches every year in China," the bank official said.

Earlier this year, Minsheng opened a branch in Yunnan Province and it is "preparing to open another in Suzhou in the middle of this year."

The bank, established in 1996 and listed in Shanghai after four years of development, has 19 branches and 171 sub-branches nationwide.

However, the bank's capital adequacy ratio was only 8.59 percent by the end of last year.

That was nearing the regulatory bottomline of 8 percent. Therefore, Minsheng has to increase its capital adequacy ratio if it wants to pursue further expansion, analysts say.

Minsheng planned the Hong Kong listing early last year, but delayed due to a scandal over a fake company name, some analysts say. Others explained Minsheng was waiting for the right time.

Meanwhile, Bank of Communications (BoCom), China's fifth-largest commercial bank, is also busy preparing for a Hong Kong listing, with trading expected to begin at the end of the month.

"I think Minsheng needs more time to observe the reaction from BoCom's listing, so the postponement is understandable," Macro Mak, head of research and executive director at Tai Fook Securities said yesterday.

Mak explained as BoCom and Minsheng are quite similar, it is reasonable for the private lender to delay its marketing activities to test sentiment and avoid a direct listing conflict.

But he projected the delay would not affect the investment spree of the bank, as Minsheng is the country's first private bank to list on an international bourse.

Chen Tianxi, an investment bank analyst at GF Securities agrees. He explained as the majority of the two banks' shares will go to institutional investors, which do not overlap, the former is unlikely to have a big impact on the latter in terms of capital pool.

However, Chen said the price of BoCom, if it goes first, will still have an impact as a reference marker.

Minsheng's shares ended down 1.65 percent at 4.77 yuan (58 US cents) yesterday.

(China Daily June 8, 2005)