Bank of Communications (BOCOM) is readying for BOCOM International Holdings for a listing on the Hong Kong Stock Exchange after the China Securities Regulatory Commission rubber stamped the spin-off proposal.
BOCOM International Holdings had already got the ball rolling on an initial public offering (IPO) by submitting a draft prospectus with the bourse in January following shareholder approval in October last year.
The group is the international securities and asset management flagship of BOCOM in Hong Kong and dates back to the formation of predecessor in 1998 and its subsequent restructuring in early 2007.
BOCOM International operates through subsidiaries, including BOCOM International Securities, to provide market financing, merger and acquisition, financial advisory, brokerage and asset management.
The group’s activities range from underwriting and compliance guidance to trading of stock and futures, and researching sectors and macro-economics.
According to its parent’s annual results for the 12 months ending December 31, 2015, BOCOM International had total assets of 8.77 billion HK dollar (1.13 billion U.S. dollar) and total revenue of 1.16 billion HK dollar, with annual net profit of 350.00 million HK dollar.
BOCOM first mooted a spin-off in August 2016 when the board signed off on listing no more than 28.0 per cent of the wholly-owned subsidiary’s post-IPO capital in Hong Kong.
At the time proceeds were earmarked for financing the development of the investment banking, securities brokerage, asset management, investment and financing businesses.
The listing should benefit both BOCOM and BOCOM International, with the latter opening up its shareholder base for new strategic investors wishing to gain exposure the sector it operates in.
Also, the two companies will each have access to the capital markets for any future fundraising.
BOCOM is a major financial services provider in China offering corporate and personal banking, among other things, to clients such as state-owned and private enterprises and small- and medium-sized businesses.
(Source: Zephus Ltd)
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