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ABC heads for world's largest IPO

By Yu Hongyan and Song Jingli (chinadaily.com.cn)
Updated: 2010-05-28 11:21
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Editor's note: Agricultural Bank of China, in which China's Ministry of Finance and Central Huijin each holds a 50 percent stake, is eyeing a $30 billion initial public offering (IPO) in 2010, which could be the biggest ever IPO in the world.
ABC heads for world's largest IPO
ABC likely to issue 51.4b shares in IPO

The Agricultural Bank of China (ABC) is likely to issue up to 51.4 billion shares in its much-awaited initial public offering (IPO), accounting for 16 percent of its total capitalization, a source close to the bank said on Tuesday.

The bank set the proportion of its new share sale at a range between 12 to 18 percent of its total capitalization and it might scale down the IPO size if the market conditions remain volatile, the source said.

The recent fluctuations in the domestic capital market have cast a shadow on the lender's offer price, which is yet to be decided amid investors' uncertainties about the overall economic outlook. Full story

ABC clears hearing in run-up to IPO
ABC heads for world's largest IPO

A worker unloads boxes outside an Agricultural Bank of China branch in Shanghai.[Kevin Lee/Bloomberg News]

Agricultural Bank of China (ABC) has cleared a preliminary hearing with the Chinese securities regulator in the run-up to its planned $30 billion IPO in Shanghai and Hong Kong.

The bank, whose initial public offering later this year is expected to be the largest of all time, went before the China Securities Regulatory Commission on May 25 in an unofficial review procedure. Full story

ABC may sell up to 53b shares in IPO

Agricultural Bank of China (ABC) is set to issue up to 53 billion A and H shares, including greenshoe, in its $30 billion IPO in Hong Kong and Shanghai, a local newspaper reported on May 24, citing market sources.

The proportion of A and H shares in the IPO has yet to be determined, Apple Daily said.

ABC, which plans to list in Hong Kong and Shanghai by July, forecast its earnings to be more than 80 billion yuan ($11.72 billion) for 2010, up about 30 percent from last year, the newspaper said. Full story

Pension fund gives ABC $2.2b pick-me-up

China's pension fund has invested 15 billion yuan ($2.2 billion) in the Agricultural Bank of China (ABC), ahead of the bank's $30 billion initial public offering (IPO), a fund official said. Full story

ABC may reduce its offering price amid investor jitters
ABC heads for world's largest IPO

A man outside an Agricultural Bank of China branch in Beijing. The bank plans to issue about 50 billion shares through a Shanghai and Hong Kong listing in July. [Provided to China Daily]

The Agricultural Bank of China (ABC) may be forced to lower the price of its massive initial public offering (IPO) after recent market volatility rattled investor confidence, analysts said.

The lender is aiming for a price-to-book (P/B) ratio, a widely watched measure of bank valuations, of around 2, which analysts said was "a bit overpriced" given the current poor market conditions.

"The shares may face the risk of falling below the IPO price if the lender goes with the planned P/B ratio because we expect that market sentiment will remain relatively weak in the months ahead," said Chen Xi, an analyst at First Capital Securities. Full story

ABC hires 9 banks for initial share sale

Agricultural Bank of China Ltd, the nation's third-largest lender by assets, hired nine banks to arrange first-time share sales in the Chinese mainland and Hong Kong in what may be the world's largest initial public offering.

The company picked China International Capital Corp (CICC), Deutsche Bank AG, Goldman Sachs Group Inc, JPMorgan Chase & Co, Macquarie Group Ltd and Morgan Stanley to arrange the Hong Kong portion, according to a statement on its website. CICC, Citic Securities Co, China Galaxy Securities Co and Guotai Junan Securities Co will manage the bank's yuan-denominated A-share offering. Agricultural Bank's own investment-banking unit will also help with the Hong Kong sale. Full story

ABC heads for world's largest IPO

May 4, 2010 ABC presents its listing request to stock exchanges in Shanghai and Hong Kong.
April 14, 2010 ABC decides on nine investment banks to help with its dual listing in Shanghai and Hong Kong.
April 7, 2010 ABC launches its IPO program, and 21 underwriters report their proposals to ABC.
Feb 2, 2009 Premier Wen says the government will invest 200 billion yuan in ABC to support its asset restructuring, which is needed for listing.
Jan 16, 2009 The Agricultural Bank of China Ltd is incorporated in Beijing, with a registered capital of 260 billion yuan.
Nov 6, 2008 The Central Huijin Corp invests dollars worth 130 billion yuan for a 50 percent stake in the bank.
Oct 22, 2008 The State Council, China's Cabinet, approves ABC's restructuring and incorporation plans.
January 2007 The National Financial Work Conference decides that ABC will float its shares at the appropriate time.
2004 ABC presents its first proposal on ownership restructuring.
1999 ABC and three other major State-owned banks spin off 1.4 trillion-yuan non-performing assets.
ABC heads for world's largest IPO

Founded in 1951, the Beijing-based bank operates branches throughout the Chinese mainland, in Hong Kong and Singapore.

Agricultural Bank of China is the nation's third-largest lender by assets. With the largest network across China, the ABC is able to provide financial services to over 350 million clients. Currently, ABC has 24,064 branches, sub-branches and outlets, 30,089 ATMs and banking relationships with 1,171 banks worldwide.

Management Team
ABC heads for world's largest IPO

Chairman Xiang Junbo

Once the vice governor of China's central bank, Xiang was appointed governor of ABC in June 2007, and became chairman of ABC in January 2009.

ABC heads for world's largest IPO

Governor Zhang Yun

Zhang, PhD in economics, was appointed as vice chairman and governor of the bank in 2009.

ABC heads for world's largest IPO

Vice Governor Pan Gongsheng

Pan was in charge of Industrial and Commercial Bank of China's listings in Shanghai and Hong Kong. He was appointed vice governor of ABC in May 2008.

Financial Highlights of ABC

Item\Year 2009 2008 2007 2006 2005
Total Assets (billion yuan)
-
7,014.35
5,305.51
5,343.94
Net Assets (billion yuan)
-
290.54
88.63
84
Net Profit (billion yuan)
65
51.47
43.79
5.81
Return on Equities
-
17.72%
N/A
-
-
Return on Assets
-
0.84%
0.88%
1.09%
-
Total Loans (billion yuan)
4,100
3,100.16
3,474.17
3,139.43
Total Deposits (billion yuan)
8,060
6,097.43
5,287.19
4,730.37
Balance of Non-Performing Loans (NPL) (billion yuan)
-
-
817.97
-
-
NPL Ratio
2.91%
4.32%
23.57%
23.43%
Provision Coverage Ratio
105.37%
63.53%
93.42%
5.05%
-
Capital Adequacy Ratio
10.07%
9.41%
N/A
-
-
Core Capital Adequacy Ratio
-
8.04%
N/A
-
-
ABC heads for world's largest IPO
Bank Major Shareholders Listing Date

Issue Price

Stock Code
Industrial and Commercial Bank of China

Central Huijin Investment Ltd

Ministry of Finance of PRC

HK Securities Clearing Company Nominees Limited

The Goldman Sachs Group, Inc

National Council for Social Security Fund

A share:
Oct 27, 2006

H share:
Oct 27, 2006

3.12 yuan

HK$3.07

601398

1398

Bank of China

Central Huijin Investment Ltd

Hong Kong Securities Clearing Company Nominees Limited

RBS China Investments S. à .r.l.

Fullerton Financial Holdings Pte Ltd

National Council for Social Security Fund

A share:
July 5, 2006

H share:
June 1, 2006

3.08 yuan

HK$2.95

601988

3988

China Construction Bank

Central Huijin Investment Ltd

Bank of America Corporation

HK Securities Clearing Company Nominees Limited

China Jianyin Investment Limited

Fullerton Financial Holdings Pte Ltd

A share: Sept 25, 2007

H share: Oct 27, 2005

6.45 yuan

HK$2.35

601939

0939

Bank of Communications

Ministry of Finance of PRC

HK Securities Clearing Company Nominees Limited

The Hongkong and Shanghai Banking Corporation Limited

Capital Airports Holding Company

State Grid Asset Management Company Limited

A share:
May 15, 2007

H share:
June 23,2005

7.90 yuan

HK$2.50

601328

3328

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