Chinese city bank joins year-end share offering rush in Hong Kong

Bank of Jinzhou was the latest Chinese city-commercial bank to launch a Hong Kong initial public offering, following Bank of Qingdao, at a time when investors are on heightened alert for mounting bad debt at Chinese lenders.

The Liaoning-based bank launched a US$943 million Hong Kong IPO on Monday to bolster its balance sheet. The 1.32 billion shares in the initial public offering are being offered in an indicative range of HK$4.64 to HK$5.54 each, IFR reported. The shares represent 23.6 per cent of the bank's enlarged capital.

The offering comes on the heels of one by Bank of Qingdao’s, which was looking to sell 990 million shares at between HK$4.75 and HK$5.21 for a total of up to HK$4.32 billion.

Another city commercial lender, Bank of Zhengzhou, may also seek to list before the end of the year.

As China’s economic growth slows to the lowest rate in more than a decade, concerns have risen over the asset quality of banks, particularly small ones with exposure to local property developers and manufacturers.

READ MORE: Bank of Qingdao IPO selling exposure to silk road and local industry

“We don’t have that much appetite for small banks right now given how the economy has performed,” said Louis Tse Ming-kwong, director at VC Brokerage. “So far I haven’t got any inquiries on them.”