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Postal Savings Bank of China Launched Global Offering

Date: 2016-09-14

Not for distribution, directly or indirectly, in whole or in part, in or into the United States or to any U.S. person. This press release does not constitute or from part of and should not be construed as, an offer to sell or a solicitation of an offer to buy any securities of Postal Savings Bank of China Co., Ltd. ( “PSBC”) in the United States or in any state or country where such offer, solicitation or sale is not permitted. 

This press release is for information purposes only and does not constitute an offer or an invitation to acquire, purchase or subscribe for securities of PSBC in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of any such jurisdiction. Potential investors should read the prospectus issued by PSBC on 14 September2016 (the “Prospectus”) for detailed information about the Global Offering.

This press release is not for release, publication, distribution or copy, directly or indirectly, in whole or in part, in or into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia in any manner whatsoever). PSBC has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended the “Investment Company Act”. The H Shares of PSBC have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the“U.S. Securities Act”) or any state securities laws of the United States and may not be offered or sold in the United States or to or for the account or benefit of U.S. persons absent registration or an exemption from the registration requirements of the U.S. Securities Act. Neither PSBC nor the seller of the securities intends to register any portion of the offering in the United States or to conduct a public offering of thesecurities in the United States. The H Shares of PSBC are being offered and sold in the United States to qualified institutional buyers as defined in Rule 144A under the U.S. Securities Act that are also qualified purchasers as defined in Section 2(a)(51) of the Investment Company Act and that agree to comply with certain transfer restrictions, and outside the United States to non-U.S. persons as offshore transactions in accordance with Regulation S under the U.S. Securities Act. The securities referred to herein have not been and will not be registered under the applicable securities laws of Australia, Canada or Japan.

This press release contains forward-looking statements and you are cautioned not to place undue reliance on any forward-looking statements contained herein. We can give no assurance that these forward-looking statements will prove to have been correct. Expectations reflected in these forward-looking statements are subject to change and we undertake no obligation and do not intend to update or revise any forward-looking statements herein.

Postal Savings Bank of China Launched Global Offering

Highlights of the Global Offering of Postal Savings Bank of China Co., Ltd.:

Ø   Number of Offer Shares under the Global Offering: a total of12,106,588,000 H Shares (subject to the Over-allotment Option), comprising initially 605,330,000 Hong Kong Offer Shares (subject to adjustment) and 11,501,258,000International Offer Shares (subject to adjustment and the Over-allotment Option)

Ø   Indicative Offer Price range: HK$4.68to HK$5.18per H Share

Ø   The Hong Kong Public Offering commenced at 9:00 a.m. on 14th September2016 (Wednesday, HK time) and is expected to close at 12:00 noon (at 11:30 a.m. for HK eIPOWhite Form applications) on 20th September 2016 (Tuesday)

Ø   Trading is expected to commence on at 9:00 a.m. 28th September2016 (Wednesday)

Ø   The stock code of Postal Savings Bank of China Co., Ltd. on the Main Board of The Stock Exchange of Hong Kong Limited is 1658.HK

Ø   The Joint Sponsors are China International Capital Corporation Hong Kong Securities Limited, Morgan Stanley Asia Limited, Merrill Lynch Far East Limited, Goldman Sachs (Asia) L.L.C. and J.P. Morgan Securities (Far East) Limited

Ø   The Sole Financial Advisor is UBS AG Hong Kong Branch

Ø   The Joint Global Coordinators of the Global Offering are China International Capital Corporation Hong Kong Securities Limited, UBS AG Hong Kong Branch, Merrill Lynch International, J.P. Morgan Securities (Asia Pacific) Limited, Morgan Stanley Asia Limited, Goldman Sachs (Asia) L.L.C., DBS Asia Capital Limited, China Merchants Securities (HK) Co., Ltd., The Hongkong and Shanghai Banking Corporation Limited and Citigroup Global Markets Asia Limited

Ø   The Joint Bookrunnersof the Global Offeringare China International Capital Corporation Hong Kong Securities Limited, UBS AG Hong Kong Branch, Merrill Lynch International, J.P. Morgan Securities (Asia Pacific) Limited (in relation to the Hong Kong Public Offering only), J.P. Morgan Securities plc (in relation to the International Offering only), Morgan Stanley Asia Limited (in relation to the Hong Kong Public Offering only), Morgan Stanley & Co. International plc (in relation to the International Offering only), Goldman Sachs (Asia) L.L.C., DBS Asia Capital Limited, China Merchants Securities (HK) Co., Ltd., The Hongkong and Shanghai Banking Corporation Limited, Citigroup Global Markets Asia Limited (in relation to the Hong Kong Offering only), Citigroup Global Markets Limited (in relation to the International Offering only), BOCOM International Securities Limited, CCB International Capital Limited, ICBC International Capital Limited, BOCI Asia Limited, Haitong International Securities Company Limited, ABCI Capital Limited, CMB International Capital Limited, First Capital Securities Limited, Sun Hung Kai Investment Services Limited, Essence International Securities (Hong Kong) Limited, China Galaxy International Securities (Hong Kong) Co., Ltd, China Securities (International) Corporate Finance Company Limited, Nomura International (Hong Kong) Limited, Deutsche Bank AG, Hong Kong Branch, CLSA Limited and Huarong International Capital Limited

Ø   The Joint Lead Managers of the Global Offeringare China International Capital Corporation Hong Kong Securities Limited, UBS AG Hong Kong Branch, Merrill Lynch Far East Limited (in relation to the Hong Kong Public Offering only), Merrill Lynch International (in relation to the International Offering only), J.P. Morgan Securities (Asia Pacific) Limited (in relation to the Hong Kong Public Offering only), J.P. Morgan Securities plc (in relation to the International Offering only), Morgan Stanley Asia Limited (in relation to the Hong Kong Public Offering only), Morgan Stanley & Co. International plc (in relation to the International Offering only), Goldman Sachs (Asia) L.L.C., DBS Asia Capital Limited, China Merchants Securities (HK) Co., Ltd., The Hongkong and Shanghai Banking Corporation Limited, Citigroup Global Markets Asia Limited (in relation to the Hong Kong Public Offering only), Citigroup Global Markets Limited (in relation to the International Offering only), BOCOM International Securities Limited, CCB International Capital Limited, ICBC International Securities Limited, BOCI Asia Limited, Haitong International Securities Company Limited, ABCI Securities Company Limited, CMB International Capital Limited, First Capital Securities Limited, Sun Hung Kai Investment Services Limited, Essence International Securities (Hong Kong) Limited, China Galaxy International Securities (Hong Kong) Co., Ltd, China Securities (International) Corporate Finance Company Limited, Nomura International (Hong Kong) Limited, Deutsche Bank AG, Hong Kong Branch, CLSA Limited and Huarong International Securities Limited

Postal Savings Bank of China Co., Ltd.(“PSBC”, Stock Code:1658.HK) launchedits global offering (the “Global Offering”) today andtrading on the Main Board of HKEx is expected to commence on28th September2016.

PSBC is a leading retail bank in China with the largest distribution network, largest customer base and superior asset quality. Established in 2007, PSBC is the youngest Large Commercial Bank and have significant growth potential. As of March 31, 2016, PSBC had total assets of RMB7,707.6 billion, total deposits of RMB6,732.4 billion and total loans of RMB2,665.8 billion, ranking fifth, fifth and seventh among PRC commercial banks, respectively. According to The Banker’s list of “Top 1000 World Banks,” PSBC ranked 22ndin the world in terms of total assets as of December 31, 2015.

Compared to its leaders, PSBC has demonstrated three major highlights, namely differentiated strategic positioning, unique operational model and significant funding advantage.As of March 31, 2016, PSBC has over 40,000 outlets nationwide covering both urban and rural areas, and over 500 million retail customers, which is a large base with high stickiness. Based on this, PSBC has established a retail banking development strategy that truly distinguishes it from the other large commercial banks to provide convenient and high-quality financial services to its customers. As of and for the year ended December 31, 2015, personal deposits represented 85.4% of its total deposits, personal loans represented 49.4% of its total loans, and profit before income tax of personal banking business represented 46.0% of its total profit before income tax, higher thanother large commercial banks.

Secondly, PSBC has established a unique operating model consisting of both direct-operated outlets and agency outlets which are postal offices owned by China Post Group. Its agency outlets have formed an organic and large distribution network together with directly-operated outlets to unleash its competitive advantage of wide coverage in cities and rural areas, enabling it to provide efficient and basic financial services of good quality to its customers, which provides PSBC a large amount of stable low-cost funding. During the past 3 years, PSBC achieved a 10.0% CAGR for its total deposits and became the only large commercial bank with a constantly-increasing market share of personal deposits.

PSBC also boasts two key strengths, including superior asset quality with strong risk management capabilities, and significant upside potential at high growth rates.

With regards to its superior asset quality and strong risk management capabilities, PSBC has been adhering to the risk appetite characterized by “moderate risk, reasonable return, and steady operation” and established a comprehensive risk management system. Its business expansion is underpinned by thorough risk assessment, and it does not engage in businesses with unfamiliar risks. As of 31 March 2016, PSBC’s NPL ratio was 0.81%, and provision coverage ratio was 286.71%, and as of 31 December 2015, PSBC’s ratio of special mention loans to total loans was 1.50%, all significantly higher than the average of other large commercial banksfor the same period. From 2013 to 2015, the ratio of itsoverdue loansto total loans and the migration ratio of specialmention loans were also far below the average of other large commercial banks.As of 30 June 2016, its NPL ratio dropped to 0.78%.

PSBC also demonstrates significant upside potential at high growth rates.The key drivers of China’s economic transformation and growth are upgrade of consumption, emergence of small and micro enterprises and new urbanization of rural regions, which bring tremendous development opportunity to the banking industry in China. PSBC’s strategic positioning of serving communities, small and micro enterprises and Sannong customers well aligns with such drivers. During the last 3 years, PSBC’s net profit has grown at a CAGR of 8.4%, higher than the average of the other large commercial banks in China for the same period.

PSBC's major business segments consist of personal banking, corporate banking and treasury business. Personal banking business is the foundation of PSBC and its primary source of operating income.It provides a wide range of products and services to individual customers and has developed a multi-access electronic banking system consisting of online banking, mobile banking, self-service banking, telephone banking, TV banking and “Weibank.” Through a complementary “online + offline” service network, PSBC provides high-quality services to 505 million retail customers.

PSBC proactively pursues simultaneous development of corporate banking and personal banking business. It provides diversified financial products and services for corporate banking customers, and has established extensive business relationships with Chinese government agencies, public institutions, financial institutions, various large-sized enterprise groups, industry-leading enterprises and numerous high-quality small enterprises.

In terms of its treasury business, as one of the most active participants in China’s interbank market, PSBC has developed competitive advantages in the financial market business as demonstrated by its active presence in trading, comprehensive product portfolio, broad and high-quality customer base and sound investment returns. As of 31 March 2016, it has established businessrelationships with 950 financial institutions, building up an ecosystem centered on partnership with banks and complemented by cooperation with securities firms, insurance companies,trust companies, leasing companies and finance companies.

In December 2015, with the objective of “introducing capital, best practices, resources, technology and know-how,” PSBC successfully diversified its ownership structure through the introduction of ten Strategic Investors, namely UBS, China Life, China Telecom, CPPIB, Ant Financial, JPMorgan, Fullerton Management Pte Ltd, IFC, DBS Bank and Shenzhen Tencent. It has a diversified combination of Strategic Investors and will leverage their respective experience and resources to help accelerate its future growth.

PSBC actively promotes strategic cooperation with its Strategic Investors in areas such as retail finance, wealth management and financial markets businesses, as applicable. Leveraging its Strategic Investors’ experience and strengths in the areas of corporate governance, business innovation, information technology and risk management, as applicable, PSBC has access to advanced know-how and resources that will improve its overall management capability and operating efficiency.

The Global Offering comprises a total of 12,106,588,000 H Shares (subject to the Over-allotment Option), comprising initially 11,501,258,000 International Offer Shares representing approximately 95% of the Offer Shares under the Global Offering (subject to adjustment and the Over-allotment Option), and 605,330,000 H Shares for subscription by the public in Hong Kong at the Offer Price, representing approximately 5% of the total number of the Offer Shares initially available under the Global Offering (subject to adjustment).The number of Shares that may be over-allocated will not exceed the number of H Shares that may be issued under the Over-allotment Option, namely 1,815,988,000 Shares, which is approximately 15% of the initial size of the Global Offering. The indicative Offer Price range is HK$4.68 to HK$5.18per H Share. The stock code of PSBC is 1658.HK. PSBC’s H Shares will be traded on the Main Board of HKEx in board lots of 1000H Shares each.

The Hong Kong Public Offering commenced at 9:00 a.m. on 14thSeptember2016 (Wednesday) and is expected to close at 12:00 noon (at 11:30 a.m. for HK eIPO White Form applications) on 20thSeptember 2016 (Tuesday). Trading of the H Shares on the Main Board of HKEx is expected to commence on 28th September 2016 (Wednesday).

Assuming an Offer Price of HK$4.68, being the low-end of the proposed Offer Price range, it’s estimated that the net proceeds of the Global Offering (after deduction of underwriting commissionsand estimated expenses borne by PSBC in relation to the Global Offering) to be approximatelyHK$55,674 million, if the Over-allotment Option is not exercised; or approximately HK$64,036million, if the Over-allotment Option is exercised in full.

Assuming an Offer Price of HK$4.93, being the mid-point of the proposed Offer Price rangeof HK$4.68 to HK$5.18, it’s estimated that the net proceeds of the Global Offering (after deductionof underwriting commissions and estimated expenses borne by PSBC in relation to the Global Offering)to be approximately HK$58,652 million, if the Over-allotment Option is not exercised; orapproximately HK$67,461 million, if the Over-allotment Option is exercised in full.

Assuming an Offer Price of HK$5.18, being the high-end of the proposed Offer Price range, it’s estimated that the net proceeds of the Global Offering (after deduction of underwriting commissionsand estimated expenses borne by PSBC in relation to the Global Offering) to be approximatelyHK$61,630 million, if the Over-allotment Option is not exercised; or approximately HK$70,886million, if the Over-allotment Option is exercised in full.

PSBC intends to use the net proceeds from the Global Offering (after deduction of underwritingcommissions and estimated expenses payable by PSBC in relation to the Global Offering) to strengthenits capital base to support the ongoing growth of its business.

Looking forward, Mr. Li Guohua, Chairman of PSBC, says that PSBCwill hold toits established strategic positioning while adapting to the trends of economic development by implementing the following strategic initiatives. From strategic planning perspective, PSBC will regard the retail banking business as itsmain body and the corporate banking business and treasury business as two wings to pursue a business philosophy of “One Body Two Wings”, reinforcing thecompetitive edge of its core business and further developing new businesses. From infrastructure perspective, PSBC will focus on areas such as talent and technology to achieve sustainable growth.PSBCwill also deepen the cooperation with its foreign and domestic strategic investors.

Mr. Li Guohua also added that PSBC will provide its customers with professional, reliable, secure and convenient services to help them succeed, and reward its shareholders with increasingly enhanced value creation capabilities, and endeavors to become the most trusted and valuable first-tier large retail bank, as well as an outstanding listed company with high growth and unique competitiveness.

Important:

1.   This press release is for information purpose only and does not constitute or include any recommendation or invitation or offer for acquisition, purchase or subscription of the securities ofPSBCnor is it intended to act as a recommendation of the sale of securities or an invitation or offer for acquisition, purchase or subscription of securities of PSBC. Investors should read the Hong Kong prospectus of PSBC for detailed information about PSBC and the proposed offering before deciding whether or not to purchase any securities of PSBC. An application to subscribe for the shares referred to in this press release by any persons shall be made solely based on the Hong Kong prospectus and the application forms issued by PSBC on 14 September 2016.

2.   No application to subscribe for the shares of PSBC should be made by any person nor would such application be accepted without the completion of a formal application form or other application procedure that is issued with or in respect of the shares of PSBC.

About Postal Savings Bank of China Co., Ltd

Postal Savings Bank of China Co., Ltd. (“PSBC”) is a leading retail bank in China with the largest distribution network, largest customer base and superior asset quality. Established in 2007, PSBC is the youngest Large Commercial Bank and have significant growth potential. According to The Banker’s list of “Top 1000 World Banks,” PSBC ranked 22nd in the world in terms of total assets as of December 31, 2015.

PSBC is distinct from other commercial banks in China in a number of important respects. Firstly, it has a unique operational model consisting of both directly-operated outlets and agency outletswhich are post offices owned by China Post Group. Its distribution network is the largest in China’sbanking industry with the widest geographical coverage, which not only enables itto deliver moreconvenient financial services to customers and to have access to long-term, stable and low-costfunding, but also creates significant opportunities for product distribution and cross-selling. In addition,it strategically focuses on providing financial services to communities, SMEs and Sannong customersand are committed to meeting the financial needs of the most promising customers during China’seconomic transformation, and will significantly benefit from the opportunities brought by China’son-going economic transformation.