(Chinadaily.com.cn)
Updated: 2007-07-20 08:35

The shares of two city-level commercial banks - the Bank of Nanjing and the Bank of Ningbo - started trading on Thursday in the Chinese A-share market and demonstrated rapid growth in share prices following its initial public offering (IPO), indicating investors' enthusiasm and confidence in the nation's high grade financial assets.

Bank of Nanjing shares debuted at 19.2 yuan(US$2.55) in the Shanghai Stock Exchange, jumping 74.5 percent from the IPO price, and further climbed to the the day's highest of 19.98 yuan in the afternoon before declining with the index and closed at 18.94 yuan. The Shenzhen-traded Bank of Ningbo opened at 20.38 yuan and performed even better with a maximum 154.9 percent surge to 23.45 yuan. The shares closed lower at 22.13 yuan, still 140.54 percent higher than it's IPO price.

Total transaction value was 5.64 billion yuan for the Bank of Nanjing and 4.12 billion yuan for the Bank of Ningbo, the highest in their respective markets.

As the first two city-level banks of the country to go public, the two lenders raised a total of 11 billion yuan from their IPOs, according to their bourse announcements. They planned to use the proceeds to supplement core capital and set up new branches.

The Bank of Nanjing, partly owned by the French group BNP Paribas, currently runs 58 branches in Jiangsu, and had 57.9 billion yuan in total assets last year. The Bank of Ningbo, with 68 branches across the affluent Zhejiang Province, possessed 56.6 billion yuan worth of total assets last year.

Bank of Ningbo said on Wednesday its unaudited first-half profit rose 41 percent due to increased loans to local companies. Net income of the bank rose to 382.8 million yuan from 271.6 million yuan a year earlier.

So far, three of China's four major state-owned commercial banks and eight medium and small sized banks have been listed on the domestic stock market, but insiders expected more Chinese banks to float shares among investors in the near future in order to reinforce their financial strength and respond to international competition.