China Minsheng Banking Corp
will compensate its existing A-share holders for any losses generated from its
share float in Hong Kong next year, said a top official of the bank.
Holders of Minsheng's H shares would not receive the lender's 2003 dividends
amid fears the dividends of the bank's A-share holders would be erased by
H-share holders, said Dong Wenbiao, president of Minsheng's head office in
Beijing.
"We will give more dividends in shares and cash to our A-share holders to
protect their benefits amid our program to launch an IPO in Hong Kong," said
Dong.
The board of Minsheng approved earlier this month plans to float shares in
Hong Kong next year to shore up its capital base.
The mainland's sole privately-funded lender said that it will issue Class-H
shares that account for no more than 25 percent of its enlarged share capital.
Minsheng said that it is expected to complete the H-share float in March or
April next year, which would enable the lender to become the first mainland bank
to sell Class-H shares in Hong Kong.
Minsheng's share sale plan in Hong Kong follows recent moves by two other
domestically-listed lenders to issue large amounts of convertible bonds, hurting
sentiment among investors who are worried the rapid expansion by the banks will
dilute their earnings.
China Merchants Bank and Shanghai Pudong Development Bank plan to issue bonds
worth 16 billion yuan (US$1.93 billion).
The capital adequacy ratio in Minsheng stood at 7.11 percent at the end of
July, down from 8.22 percent at the end of 2002.
Its expansion in the world's most populous country has been rapid - its
assets totalled 359 billion yuan at the end of September, compared with 70
billion yuan at the end of 2000, according to Dong.
To support its growth, Minsheng issued 4 billion yuan worth of five-year
convertible bonds in February.
