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Last Updated: Wednesday, 17 May 2006, 16:47 GMT 17:47 UK
Bank of China starts share offer
Foreign exchange board at a Bank of China branch
Bank of China's foreign exchange expertise is seen as attractive
Bank of China, the country's second largest lender, has announced the launch of a $9.8bn (5.2bn) share flotation on the Hong Kong market.

Set to be the world's biggest initial share offering since 2000, it comes as China continues to open up its banking sector to foreign competition.

A consortium of international banks led by Royal Bank of Scotland spent $3bn on a 10% stake in Bank of China last year.

Trading of Bank of China shares is expected to start on 1 June.

Opening up

China's state banks face a huge increase in competition from December, when the government will open the retail banking market to overseas lenders who will be able to open their own branches in the country.

A number of Chinese banks have been seeking foreign investment to help them prepare for the challenge.

A woman staring at a Chinese bank note at an exhibition in Beijing
Chinese banks have been told to become more transparent

The country's largest lender, Industrial & Commercial Bank of China, is planning a $10bn share flotation for later this year.

Bank of China has one of the most international outlooks of all China's banks, with offices around the world and a listed subsidiary in Hong Kong.

Its position as China's principal foreign exchange bank has also enhanced its profile in the eyes of would-be investors.

But some analysts have warned off investors, pointing out the bank's problems with bad loans, fraud investigations and antiquated computer systems.


SEE ALSO:
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Bank of America invests in China
17 Jun 05 |  Business
Chinese bank to list in Hong Kong
13 Jun 05 |  Business


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