Jan. 29, 2007 (China Knowledge) – Fuzhou-based Industrial Bank, in which Hang Seng Bank <11> holds a 16% stake, will consider a listing in Hong Kong following the completion of its A-share sale on the Shanghai Stock Exchange early next month, president Li Renjie said.

Li said that its move to list in Hong Kong or other overseas markets is part of its long-term growth strategy. He also said that Hang Seng Bank could help the mid-sized lender in its retail banking and intermediate business, as well as cost management.

Hang Seng Bank, a unit of HSBC Holdings, became a strategic investor in Industrial Bank in April 2004.

Industrial Bank plans to raise RMB 16 billion by selling one billion shares at RMB 15.98 each.

The listing, set for next Monday, will be the fourth-biggest domestic offering by a mainland bank.

The proceeds will be used to boost capital adequacy ratio to 8%, the minimum required by the central bank, from 7.17% at the end of June. Some of the proceeds will be used to launch new products, open more branches and upgrade computer systems.

The lender had assets of RMB 532 billion in June last year. Profit for the first six months of 2006 was RMB 1.7 billion, more than half of the RMB 2.5 billion for the fiscal 2005. Revenue in 2005 rose 43% to RMB 9.3 billion due to higher investment returns.

Industrial Bank’s biggest shareholder is the Fujian provincial government, which owns 25.5%. The Singapore government and the World Bank's International Finance Corp own a 5% and 4% stake respectively.