The Initial Public Offering of the Industrial and Commercial Bank of China (ICBC)
University of Pennsylvania - The Wharton School
University of Pennsylvania - Finance Department; European Corporate Governance Institute (ECGI)
Boston College - Finance Department; University of Pennsylvania - Wharton Financial Institutions Center; China Academy of Financial Research (CAFR)
University of Alberta - School of Business; University of Alberta - Department of Finance and Statistical Analysis
November 27, 2011
The conventional wisdom up until the crisis was that efficient financial systems required privately owned banks and financial institutions. The events since 2007 have shown that financial systems such as China’s, where banks are government owned but are also publicly listed can have a significant advantages in terms of financial stability. In this paper we investigate the initial public offering (IPO) of the Industrial and Commercial Bank of China (ICBC). At the time it took place, the ICBC IPO was the largest ever. The firm was the first to be listed simultaneously in Hong Kong and Shanghai. This paper gives the background of the industry at the time, considers the way the IPO was conducted and provides a valuation. The IPO provides an interesting example of how the Chinese government has improved the governance of its financial institutions, while at the same time maintaining a majority ownership position in the company.
Number of Pages in PDF File: 39
Keywords: banks, IPO, non-performing loans, markets, ICBC
JEL Classification: O5, K0, G2working papers series
Date posted: November 29, 2011
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