Bank of China Launches Successful IPO 02 June 2006, 01:08 UTC

The Bank of China, the country's second largest bank, raised $9.7 billion in its initial public stock offering, or IPO, on Hong Kong's Hang Seng Market. Bank of China Chairman Xiao Gang marked the occasion by expressing his confidence in China's economic prospects.

"The Bank of China listing is one of the largest and the most successful Initial Public Offerings (IPO) in the world," he said. "It represents international investors' confidence in China's long-term economic prosperity, reformation and open market."

Analysts say the stock did better than expected, considering the broader Hong Kong stock market fell 1.3 percent Thursday. The Bank of China is the nation's most international bank, with branch offices in 25 countries and overall assets of $586 billion (US).

Investors apparently are betting on China's fast growing economy, and an increased demand by Chinese consumers for new and better banking services. The Bank of China's reputation had suffered in recent years from a series of bad loans and corruption scandals. Thursday its directors appeared to have put that behind them.

"The Bank of China's IPO is welcomed by international investors," said Xiao Gang. "We are doing our best to grow our business and make profit for shareholders."

China's government has recently sold shares of several major state-run banks as part of a campaign to reform its financial system. World Trade Organization membership obligates Beijing to open its banking system to foreign competition later this year.