China's Huishang Bank sets price range for up to $1.3 bln Hong Kong IPO -source


* Pricing expected on Nov. 6

* Huishang becomes second Chinese bank to launch Hong KongIPO in Oct

* Chinese lenders are estimated to raise about $11 bln overthe next 8 months

By Elzio Barreto

HONG KONG, Oct 26 (Reuters) - Huishang Bank Corp Ltd plansto launch its Hong Kong IPO next week, seeking to raise up to$1.3 billion to bolster its balance sheet after years of steepgrowth in lending, in the biggest listing of a financial firm inthe city in three years.

Huishang Bank is offering 2.61 billion shares in a range ofHK$3.50 to HK$3.88 each, putting the total deal value at up toHK$10.13 billion ($1.31 billion), a person with direct knowledgeof the matter told Reuters on Saturday. The offer is expected tobe priced on Nov. 6, added the person, who was not authorized tospeak publicly on the matter.

Huishang Bank's initial public offering will follow one byBank Of Chongqing, which is seeking to raise up to $593 millionin a Hong Kong offer. Bank of Chongqing, among several mainlandChinese lenders to tap capital markets to bolster their balancesheets, is set to price its up to $593 million IPO on Oct. 31.

City commercial banks such as Huishang and Bank of Chongqinghave grown rapidly in recent years because of consolidation inthe sector, surging loan demand from small- and medium-sizedenterprises and a boom in consumer finance.

China had 144 city commercial banks at the end of 2012 andcombined assets worth 12.35 trillion yuan ($2.03 trillion), orabout 9.2 percent of the country's total.

Chinese financial firms, including Huishang and Bank ofChongqing, are aiming to raise around $11 billion through HongKong IPOs between now and the first half of next year, accordingto Thomson Reuters estimates.

The two were among several other small and medium-sizedChinese lenders that have sought listings in Hong Kong afterwaiting several years for approval from the securities regulatorin mainland China. Other financial firms with deals in thepipeline include China Everbright Bank, Harbin Bank, China CindaAsset Management and Longjiang Bank.

Huishang started meeting with investors about its deal onOct. 21. The bank could not immediately be reached for comment.

The deal is the biggest in Hong Kong by a bank sinceChongqing Rural Commercial Bank raised $1.7 billion inits IPO in September 2010, according to Reuters data.

Huishang had total assets of 3,242.24 billion yuan at theend of 2012 and total deposits of 2,395.43 billion yuan,according to the company's website.

Its non-performing loan ratio was 0.58 percent and it earneda net profit of 4.31 billion yuan in 2012, up 23.3 percent fromthe year before.

Huishang, which was set up in 2005 through the merger ofseven urban credit cooperatives, has about 190 branches.

BOC International, Citic Securities International , JPMorgan, Morgan Stanley and UBS AG are leading the transaction.

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