Beijing: The state-owned Agricultural Bank of China plans to sell a 15 per cent stake in what could become the world's largest initial public offering, China's securities regulators said.
The China Securities Regulatory Commission posted the bank's application online on Friday and said it will review it on Wednesday.
Agricultural Bank is one of China's top four state-owned commercial lenders and the last of the four to sell shares to the public.
The Beijing-based bank is China's main rural lender. The bank's application says its profit rose 26 per cent to 65 billion yuan (Dh35 billion) in 2009.
The bank's IPO application says it plans to sell 22.235 billion shares on Shanghai's stock exchange and 25.41 billion shares in Hong Kong. No price range was announced.
The move comes as China's government is concerned that its banks might face problems if they cannot repay multibillion-dollar borrowing.
Chinese banks are seen as the world's healthiest after avoiding the mortgage-related turmoil that hit Western banks.
But analysts warn China's recent four trillion yuan ($586 billion) stimulus plan might leave lenders with a mountain of bad loans in areas such as real estate and infrastructure.
Facing losses
China has long been trying to strengthen its banks into profit-driven institutions that judge borrowers on commercial grounds.
But after the global crisis struck in 2008, banks were ordered to relax lending standards to support the stimulus.
The World Bank and China's central bank have recently said banks could face losses if the debts aren't repaid.
China's central government paid for only one-quarter of the stimulus plan, and the rest came from state companies and borrowing by lower-level governments from state banks.
Agricultural Bank is the least profitable of China's four big state-owned banks, and its market debut had been delayed while it was restructured and cleared away a heavy load of unpaid loans.
It received a $19 billion government bailout in November 2008 to strengthen its balance sheet.
China's three other major state-owned banks — Industrial & Commercial Bank of China, China Construction Bank and Bank of China — earlier had IPOs on the Hong Kong and Shanghai stock exchanges following similar restructurings.
Agricultural Bank has said it selected Goldman Sachs Group, JP Morgan Chase, Macquarie Group, China International Capital, Morgan Stanley and Deutsche Bank AG. for its IPO in Hong Kong.
China International Capital and three other Chinese brokerages were chosen to advise its share sales in China.
