Reuters: Financial Services and Real Estate: China's Bank of Dalian eyes share listing

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China's Bank of Dalian eyes share listing Apr 1st 2012, 11:57 BOAO, China, April 1 | Sun Apr 1, 2012 7:57am EDT BOAO, China, April 1 (Reuters) - Bank of Dalian, one of China's smaller lenders, aims to list shares on the domestic market this year or next to boost its capital base, the bank's president, Wang Jinping, said on Sunday. Speaking on the sidelines of the 2012 Boao Forum for Asia on the southern Chinese island of Hainan, Wang also said he expects China's central bank to tread cautiously in easing its monetary policy. "We are in the queue, it could happen this year or next year, depending on economic and stock market conditions," he told reporters, adding the bank's listing plan is being reviewed by regulators, along with those of several other small banks. China's banking regulator encourages smaller banks to float shares domestically, Wang said, without giving further details. The bank, which is based in the northeastern port city of Dalian, has opened eight branches across the country, but the pace of expansion is set to slow this year, Wang said. Meanwhile China's central bank is likely to cut lenders' reserve requirement ratio (RRR) further to boost credit as economic growth slows but the easing will be gradual, Wang said. Whether the central bank will lower benchmark interest rates will depend on China's inflation outlook, he added. "Don't expect policy loosening to be very quick -- the government has to bring inflation under control," he said. Chinese regulators are unlikely to loosen the grip on banks' loan-to-deposit ratios, which is now at 75 percent, he said. Investors widely expect further cuts in the RRR, following cuts of 50 basis points each in November and February that brought the ratio down to 20.5 percent from 21.5 percent. Annual inflation cooled to a 20-month low of 3.2 percent in February but policymakers remain wary of inflation risks. Meanwhile annual economic growth is seen slowing to just over 8 percent in the first quarter from 8.9 percent in the previous quarter -- the fifth consecutive quarter of slowdown. Interest rate liberalisation in China will happen "sooner or later", which could put more pressure on smaller banks as they compete with dominant state banks, Wang said. Beijing controls China's interest rate market by setting a ceiling on deposit rates and a floor on lending rates. This protects banks from competition and ensures they have a decent interest rate margin, which is around 300 basis points. (Reporting by Kevin Yao; Editing by Greg Mahlich) Link this Share this Digg this Email Reprints

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