Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Chinese bank may be world's biggest IPO

abc_gi.top.jpgA woman walks past a Shanghai branch of the Agricultural Bank of China. By David Ellis, staff writer


NEW YORK (CNNMoney.com) -- One of China's biggest banks is on track to become the largest IPO in history.

Agricultural Bank of China, a lender which boasts more customers than the entire U.S. population, has raised $19.2 billion from investors, according to an individual familiar with the matter.

The Beijing-based lender, which plans to list its shares on exchanges in both Hong Kong and Shanghai, said it sold 25.4 billion shares in Hong Kong at $0.4107 a piece, totaling $10.43 billion. Its Shanghai stock, which totaled 22.2 billion shares, priced at $0.3955 a share, raising approximately $8.78 billion.

Should the company agree to exercise its option to sell more shares, which is expected, the bank would raise more than $22 billion.

"It will, barring extenuating circumstances, be the world's largest IPO," said Scott Sweet, senior managing partner of the IPO research firm IPO Boutique.

Agricultural Bank's offering would barely edge out fellow lender Industrial and Commercial Bank of China, which currently holds the record for world's largest IPO by raising $21.9 billion when it went public in 2006.

Visa (V, Fortune 500) currently holds the U.S. record after it raised nearly $18 billion in its market debut in 2008. There is some speculation that General Motors could top that once it eventually goes public again.

Despite concerns about brewing real estate troubles in China, expectations have been for Agricultural Bank to make a splash among investors.

Although the bank will not trade on a U.S. exchange, many on Wall Street are keeping a close eye on the IPO to determine whether China's economy and stock market are showing any signs of cooling off.

With nearly 24,000 branches and a customer base of approximately 320 million, Agricultural Bank is poised to grow as both the Chinese banking system and domestic consumers become more sophisticated.

Investors will have to wait to see how the broader market responds to the offering however as there is typically a lag between the time Chinese companies price their shares and the first day of trading.

Shares of the company are expected to begin trading July 15 in Shanghai. Hong Kong shares are set to follow a day later.  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.63%3.68%
15 yr fixed2.76%2.79%
5/1 ARM2.97%2.94%
30 yr refi3.66%3.72%
15 yr refi2.79%2.82%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,891.16 117.52 0.66%
Nasdaq 4,817.59 42.23 0.88%
S&P 500 2,081.43 16.13 0.78%
Treasuries 1.86 0.05 2.53%
Data as of 12:16am ET
Company Price Change % Change
Bank of America Corp... 14.77 0.21 1.44%
Ford Motor Co 13.62 0.06 0.44%
Apple Inc 93.64 -0.10 -0.11%
Freeport-McMoRan Inc... 13.55 -0.45 -3.21%
Frontier Communicati... 5.44 -0.12 -2.16%
Data as of May 2
Sponsors

Sections

Shares of Amazon have been on fire lately. Investors are bullish after the company's latest earnings. Even Warren Buffett is a big fan of Amazon CEO Jeff Bezos -- even though Berkshire Hathaway does not own Amazon stock. More

It's getting worse for Puerto Rico. The island defaulted on $422 million in bonds related to its Government Development Bank on Monday. Congress is currently debating an aid package for the island. More

Tech leaders Apple, Alphabet and Microsoft all disappointed Wall Street with their latest earnings reports. And that's dragged the Nasdaq back near correction territory. Is this the beginning of another huge pullback or an overreaction? More

Visa says new software will allow consumers to check out with chip cards as fast as swiping a card with magnetic strip. More