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Last Updated: Monday, 14 August 2006, 15:04 GMT 16:04 UK
Chinese bank moves nearer float
Chinese bank worker counts notes
The ICBC's planned flotation would be the world's largest, worth $21bn
China Merchants Bank has taken a step closer to flotation on the Hong Kong stock market, in a move that could raise about $2.4bn (1.27bn).

The Shenzhen-based firm received approval from the China Securities Regulatory Commission for the plan.

It would follow in the footsteps of Bank of China and China Construction Bank which have floated this year.

But there are fears that Chinese banks have been overvalued, with questions raised over levels of bad debt.

Government orders

Chinese state-owned banks have been raising billions of dollars as the country opens the banking market to foreign competitors under its terms of joining the World Trade Organization.

However some investors, especially in the US, have flagged up concerns about a lack of transparency - especially over the bad debts on the banks' balance sheets, the results of widespread lending to uneconomic state-owned enterprises.

In July, Bank of China shares were floated in Shanghai in the country's biggest ever domestic initial public offering. It had earlier floated in Hong Kong.

The state-run bank, the country's second-biggest lender, raised $2.5bn from the mainland float, and $9.7bn in the Hong Kong float.

The Industrial and Commercial Bank of China is also poised to launch what is expected to be the world's largest float - valued at up to $21bn.

Flotation of China bank approved
19 Jul 06 |  Business
Bank of China raises more money
07 Jun 06 |  Business
Bank of China sale raises $9.7bn
24 May 06 |  Business
China bank makes HK stock debut
27 Oct 05 |  Business

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