The Initial Public Offering of the Industrial and Commercial Bank of China (ICBC)

39 Pages Posted: 29 Nov 2011

See all articles by Darien Huang

Darien Huang

Cornell University - Department of Finance

Franklin Allen

Imperial College London

Jun "QJ" Qian

Fudan University - International School of Finance (FISF); National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER)

Mengxin Zhao

Independent; Securities and Exchange Commission (SEC)

Date Written: November 27, 2011

Abstract

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.

Keywords: banks, IPO, non-performing loans, markets, ICBC

JEL Classification: O5, K0, G2

Suggested Citation

Huang, Darien and Allen, Franklin and Qian, Jun and Zhao, Mengxin and Zhao, Mengxin, The Initial Public Offering of the Industrial and Commercial Bank of China (ICBC) (November 27, 2011). Available at SSRN: https://ssrn.com/abstract=1965572 or http://dx.doi.org/10.2139/ssrn.1965572

Darien Huang

Cornell University - Department of Finance ( email )

Ithaca, NY 14853-4201
United States

Franklin Allen (Contact Author)

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Jun Qian

Fudan University - International School of Finance (FISF) ( email )

220 Handan Road
Shanghai, 200433
China

HOME PAGE: http://fisf.fudan.edu.cn/en_show-112-69.html

National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER) ( email )

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

Mengxin Zhao

Securities and Exchange Commission (SEC) ( email )

450 Fifth Street, NW
Washington, DC 20549-1105
United States

Independent

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