(Yicai Global) Jan. 5 -- Guangzhou Rural Commercial Bank Co. is poised to become China's third such lender to float on the Hong Kong stock market after securing the green light to sell as many as 3.13 billion shares. It is also the first Guangdong-based bank approved for IPO.
The application was given the nod by the banking regulator in the southern coastal province of Guangdong, the China Banking Regulatory Commission said in a statement on its website. It follows Hong Kong IPOs by rural commercial banks from Chongqing and Jiutai. Proceeds from GRCB's float will be used for capital replenishment.
GRCB's assets stood at nearly CNY592.4 billion as of the end of September, with a capital adequacy ratio of 12.45 percent and a non-performing loan ratio of 1.79 percent. Net profit rose 18.7 percent to CNY3.48 billion (USD503 million) in the nine months ended September from a year earlier. The bank was formed in November 2009 through the reorganization of Guangzhou Rural Credit Cooperative Association.
The lender has more than 630 outlets and ranks No. 1 among commercial banks in Guangzhou in terms of total value of outstanding agricultural loans and their proportion to total lending.
The bank started to establish itself as a comprehensive financial services group in 2010. In March that year, it set up Huaibin Zhujiang Rural Bank, marking the start of expansion in the regional market. Zhujiang Financial Leasing, a subsidiary wholly owned by GRCB, opened in December 2014, making GRCB the first Chinese rural commercial bank to open a financial leasing business.
GRCB has a relatively less concentrated equity structure. The bank's 10 largest shareholders have a combined 31.25 percent stake, with each holding less than five percent. Its largest shareholder, Guangzhou Finance Holdings Group, the local financial business integration platform operated by Guangzhou government, owns 4.91 percent of the bank.
The second- and third-largest shareholders, Pearl River Enterprises Group and Guangzhou Vanlead Group, have 4.53 percent and 4.29 percent, respectively.