Speaking at a press conference to announce the bank's initial public offering (IPO), Chief Executive Liu Jianbao said the Hong Kong arm of the leading state-owned Chinese bank intended to sell up to 25 percent of the company's stock through the share offer.

The indicative price range for the institutional offering of approximately 2.6 billion shares has been set at HK$6.93-9.50 (US$0.89-1.22) for institutional investors, he said.

"We plan to offer an incentive to retail investors in the form of a five percent discount to the institutional offer price," said Liu.

Standard Chartered Bank will become a strategic investor through the IPO, paying US$50 million for less than a 2.5 percent stake in Bank of China (Hong Kong).

Its stake is dependant on the price of the offering and whether the full allotment of 25 percent of Bank of China's (Hong Kong) shares are sold.

"While we compete in some areas, our two banks have been good friends for a long time and we intend to explore areas of potential strategic cooperation with Standard and Chartered Bank," said Bank of China chairman Liu Mingkang.

However, a planned dual listing in New York had been put on hold indefinitely.

"We considered very carefully our listing options, including in the US. But the Bank of China has its home in Hong Kong and we think it is right to list in the Hong Kong market," said Liu Mingkang.

One factor which had swayed the bank had been the stringent listing requirements in the US "which would have required a lot of hard work," he admitted.

However, Liu denied the delay to its original plan for a September listing had been due to media reports which had suggested instability on global financial markets following the terrorist attacks in the United States in September last year.

On listing, the bank will become the territory's second largest listed bank on assets behind HSBC.

The bank is one of Hong Kong's three currency note issuing banks. The others are HSBC Holdings plc and Standard Chartered Bank.

(People’s Daily July 8, 2002)