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China's DRC Bank raises $1. 2 B in Hong Kong IPO

23.09.2021

Bloomberg - - Dongguan Rural Commercial Bank Co. raised $0.9 billion $1.2 billion in its initial public offering in Hong Kong after pricing shares at the bottom of the market range, according to people familiar with the matter.

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The lender sold shares on HK $7.92 apiece, said the people, who asked not to be identified as the information isn t public. DRC Bank had marketed 1.15 billion shares for $8.71 as much as HK$ 8.75. An external representative for DRC Bank declined to comment.

In a tough week for Chinese lenders, DRC Bank is raising funds in the Asian financial hub. A number of China s publicly traded banks have rushed to assuage investors who are concerned about risks from the deepening crisis at China Evergrande Group and regulators broader crackdown on developers use of leverage.

The bank lists its exposure to the real estate sector among risk factors in its commercial prospectus and said the industry accounts for 8.8% of its preliminary loans as of 31 March.

Adding to those concerns is the fact that bank IPOs tend not to be immediately successful because of a long-standing rule in China barring state-owned companies from selling shares at prices below their book values.

The prospectus states that DRC Bank was China s fifth largest rural commercial bank by assets at the end of the year last year. The bank, based in Pearl River Delta region, plans to use the proceeds for purposes including strengthening its capital base and supporting business growth.

The shares will start trading on Sept. 29. The share are due to begin trading for the shares. CMB International Capital Ltd. CMB merchants securities Co. China - Stock Exchange Limited. Agricultural Bank of China Ltd. and Industrial Commercial Bank of China Ltd. are joint sponsors for the offering.