China's sole privately owned lender China Minsheng Bank is looking to sell US$1bn of its shares overseas, with Citigroup, Deutsche Bank and Goldman Sachs believed to be competing to arrange the transaction, reported Bloomberg. It was thought possible that Minsheng might choose all three banks. The sale, planned for early 2004, would give Minsheng funds to open new branches and increase loans to help it compete with Bank of China and other state-owned rivals. It is believed that Minsheng is asking the investment banks to underwrite the offering at about four times the bank's book value.
Minsheng has only 169 branches compared with 26,000 operated by the Industrial and Commercial Bank of China, the country's biggest lender. Minsheng's Yn4.1bn domestic share offering in 2000 was 100 times oversubscribed – the most sought-after placement of that year. Founded in 1996 by pig-feed tycoon Liu Yonghao and other wealthy businessmen, its profits almost doubled last year. As a privately owned institution, Minsheng is perceived to be more disciplined in its lending than state-owned banks and less prone to putting government policy before the interests of shareholders.