China Everbright Bank gets nod for Shanghai IPO-sources

SHANGHAI, July 26 (Reuters) - China's securities regulator approved China Everbright Bank's potential $2.9 billion Shanghai initial public offering, two sources with direct knowledge of the matter said on Monday.

Everbright Bank, China's 11th biggest bank by assets, would sell up to 6.1 billion shares in the IPO. The Bank is looking to place out about half of the shares to strategic investors, a local newspaper reported on Saturday. [ID:nTOE66N008]

Controlled by Central Huijin, the investment arm of China's sovereign wealth fund, Everbright Bank could face a big capital shortfall in the next three years without the IPO, the bank said in a draft prospectus issued last Thursday.

This month, China witnessed the world's second-biggest IPO when Agricultural Bank of China (601288.SS) (1288.HK) completed its $19 billion dual-listing in Shanghai and Hong Kong.[ID:nSGE66E0CI]

Most Chinese lenders are experiencing a serious capital squeeze after a lending binge last year to support the government's 4 trillion yuan ($590 billion) economic stimulus and as the banking regulator tightened capital rules.

Top state-controlled lenders, such as Industrial and Commercial Bank of China (ICBC) (601398.SS)(1398.HK), Bank of China (3988.HK)(601988.SS) and China Construction Bank (0939.HK) (601939.SS), have said they would ask shareholders for billions of dollars to replenish their capital positions.

ICBC, the world's most valuable bank, has said it would raise more funds by offering rights to holders of its Hong Kong-listed H-shares, as well as its Shanghai-listed A-shares. ICBC aims to raise up to $6.6 billion from the offerings, sources told Reuters this month.[ID:nLDE6661C1] ($1=6.780 Yuan) (Reporting by Soo Ai Peng; Editing by Jacqueline Wong)