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China CITIC Bank Becomes a Joint-stock Company
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China's CITIC Bank, the seventh largest commercial bank on the Chinese mainland, has been transformed into a joint-stock company and is likely to list this year.

The State Administration for Industry and Commerce last Sunday issued the previously wholly state-owned bank with a new business license. The bank's new name is CITIC Bank Co., Ltd., the bank said in a Friday press release.

The move reflects solid progress in the bank's corporate governance and lays the foundation for stable, healthy development in the future, says the press release.

The bank submitted its share reform plan to the State Council last May. Its president Chen Xiaoxian has said the bank will list in Hong Kong early this year and later on mainland stock markets.

Last November, Spanish banking group Banco Bilbao Vizcay Argentaria (BBVA) signed an agreement to buy a five-percent stake in CITIC Bank for 989 million euros (US$1.128 billion ).

Three of China's four major state-owned commercial banks have gone public since China launched share reforms in state-owned lenders in 2003. The Agricultural Bank of China (ABC) will be the last one to list.

The ABC is speeding up its share reforms and intends to list as soon as possible, said Zhou Xiaochuan, governor of the central bank.

With 416 branches, CITIC Bank had total assets of 689.5 billion yuan (US$86.2 billion) at the end of September, 11.84 percent up on the end of 2005.

It raked in a pre-tax profit of 5.7 billion yuan from January to September last year, with its non-performing loan ratio down to 2.79 percent and a capital adequacy ratio of 9.18 percent.

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CITIC Bank pricing hits 2.9 times 2007 book value

Katherine Ng

Friday, March 30, 2007

China CITIC Bank, the corporate and retail banking unit of CITIC Group, has been priced at a range between 2.2 times and 2.9 times its 2007 book value, according to reports from its dual-listing sponsors.

"The valuation was equivalent to the average current trading price-to- book value multiple of the H-share listed banks," Macquarie Bank, one of its sponsors, wrote in its report quoting a range between 2.62 times to 2.9 times.

Sponsor Citigroup estimated the lender's 2007 valuation as ranging from 2.2 times to 2.9 times.

The Beijing-based lender, which kicked off its pre-marketing activities Thursday, is expected to gain official approval of its A-share listing April 2 and will start its roadshow after the Easter holidays. The company plans to raise up to US$3 billion (HK$23.4 billion) from its combined A and H share sale, depending on the final indicative price range which will be set April 16.

China CITIC Bank syndication members were also inviting potential investors Thursday to lock up the 1.35 percent of the enlarged share capital.

"We will retain a small portion for synergy partners but there will not be a specific tranche for tycoons," a source close to the situation said.

Mizuho Corporate Bank is said to be a potential investor, taking about 0.3 percent of the total new shares on offer, market sources said.

"The bank is selling its strong quality corporate banking business," a fund manager said, after attending an analyst briefing Thursday. "Syndication analysts said the bank has a good portfolio of private enterprises and foreign-owned joint-stock corporate clients, which have a lower default risk."

As of December, almost 79 percent of CITIC Bank's operating income came from corporate banking, helping it towards its highest ever average annual growth of 32 percent pre-tax profit and 25 percent pre-provision operating profit from 2004 to 2006.