Pudong Bank eyes share sale after Olympics

SHANGHAI (Reuters) - Shanghai Pudong Development Bank (600000.SS), a China partner of Citigroup Inc (C.N), has not applied for regulatory approval of a planned share sale, which will likely be delayed until after August's Olympic Games due to weak market conditions, its president said on Friday.

"It seems we may have to wait quite a long time to issue our new shares, given that the market environment is very poor at present," Pudong Bank President Fu Jianhua told Reuters in an interview on the sidelines of a financial forum in Shanghai.

"We must consider the market's ability to handle it," he added, saying the launch of the share issue was likely to come some time after the Beijing Olympics.

The bank's shareholders in March approved a plan to raise up to 20 billion yuan ($2.86 billion) via a sale of new shares in order to boost its capital base.

Shanghai's benchmark share index tumbled about 50 percent in the six months after hitting a record peak last October, in part due to concerns about heavy new supplies of shares from initial and secondary offerings.

China's stock regulator has tried to stabilize the market by limiting large share sales after lock-up expiries and allowing domestic fund houses to issue more mutual funds.

Some market watchers also believe regulators may delay approvals of major share sale plans until after the Olympics, in an effort to restore investor confidence.

DELAYED APPROVALS

China Everbright Bank Chairman Tang Shuangning told reporters in Shanghai on Friday that the bank's initial public offering may be delayed until after the Olympics, depending on regulatory approval and market conditions. (For details click ID:nSHA237239)

Ping An Insurance (2318.HK) (601318.SS), which plans an offering of local-currency A shares worth billions of dollars, announced on Thursday that it would not issue new domestic shares for at least six months due to volatility in China's capital markets.

Late last month, Pudong Bank announced its first-quarter net profit nearly tripled to 2.8 billion yuan, buoyed by rapid expansion in loans and fee income-based businesses such as wealth management services and credit card issuance.

Fu said the bank's earnings growth would remain strong for the rest of the year despite Beijing's macroeconomic tightening, although he gave no concrete forecast.

"The purpose of our fundraising via the share sale is very clear. We want to boost our capital base, which is certainly a good thing for the bank's long-term operation and development," Fu said.

"Our capital base now is above the minimum regulatory requirement but you have to increase your capital base continuously if you want to support fast growth in your business," he said.

He added that the bank also wanted to sell its new shares at a good price when the market becomes more optimistic.

In March, Pudong Bank Chairman Ji Xiaohui told Reuters that the bank would not need to tap the capital markets for a major fundraising for another three years after its planned new share sale this year. (For details click ID:nPEK259943)

($1=7.004 Yuan)

(Editing by Edmund Klamann)