Bank of China, the country's third biggest bank, is reportedly planning an IPO that may earn investor Royal Bank of Scotland GBP3 billion.
As China prepares to open its financial sector to the world next year, banks are reforming to remain competitive. The Bank of China has already raised money for reforms with the GBP1.7 billion sale of a 10% stake to a group of investors including Royal Bank of Scotland, which invested GBP900 million.
The bank hopes that the listing of a 15% stake, which is expected to be on both the Hong Kong and Shanghai bourses, will raise GBP4.6 billion. According to speculation in the media, the bank agreed to list on the mainland exchange in return for government approval of the IPO. The Shanghai exchange requires investors to take a chance on pricing, but a high profile IPO may boost its standing.
Last year the Bank of Communications and China Construction Bank successfully listed on the more established Hong Kong exchange.