China Minsheng Banking Corp Wednesday said it gained approval from the Chinese mainland's securities regulator for an initial public offering in Hong Kong that could raise up to US$4.02 billion according to one analyst.

The Beijing-based bank said China Securities Regulatory Commission accepted its application on Tuesday and the share sale is still pending approval by regulators in Hong Kong, according to a statement to Shanghai Stock Exchange.

The nation's first privately owned bank planned to sell up to 15 percent of its enlarged share capital in Hong Kong.

Underwriters will be entitled to issue additional shares of up to 15 percent of the issuing scale if demand for the stock exceeds the original offer.

The bank could sell as much as 3.82 billion shares in Hong Kong, or 20.3 percent of its 18.82 billion shares at present, said Mao Junhua, an analyst from China International Capital Corp.

"Listing in Hong Kong could extend the bank's financing channels and replenish its capital," said Mao.

The bank said yesterday in a separate filing that its capital adequacy ratio declined to 8.48 percent at the end of June, compared with 9.22 percent at the end of last year.

Although it is higher than the 8 percent regulatory minimum, it is less than the 10 percent needed for Chinese banks to participate in mergers and acquisitions lending.

Mao estimated the H-share issue price at between HK$6.10 and HK$9.20, and the bank could raise as much as HK$31.2 billion (US$4.02 billion).

(Shanghai Daily August 20, 2009)