By Elzio Barreto and Fiona Lau
HONG KONG (Reuters) - China's Postal Savings Bank, the nation's biggest lender by number of branches, may file for a Hong Kong IPO worth up to $8 billion (5.61 billion pounds) next week, people close to the deal said, in what is expected to be the world's biggest listing of the year.
While the offering has come down in size from an up to $15 billion (10.52 billion pounds) mooted in December due to a slide in Hong Kong stocks, it is expected to draw much investor interest by virtue of its huge customer base and as it is considered to have a much lower ratio of bad loans than rivals.
Postal Savings Bank of China (PSBC) [IPO-PSBC.HK], the last of China's major state-owned banks to list, saw big name investors such as Alibaba's (N:BABA) Ant Financial unit and Canada Pension Plan Investment Board invest in a fund-raising round late last year that valued it at about $41 billion.
The bank is still waiting for some final approvals before deciding on the exact day of the filing, said the people, who declined to be identified as details of offering have not been formally announced.
The deal could raise between $7 billion and $8 billion, they said, surpassing by far the biggest IPO so far in 2016, a $2.6 billion deal from Danish utility DONG Energy (CO:DENERG).
PSBC, which has about 500 million clients or nearly half of China's population, did not immediately reply to a Reuters request for comment on its IPO plans.
The deal would also give a much needed boost to IPO activity in Hong Kong, which like other major financial centres has seen new listings decline amid concerns over the U.S. Federal Reserve raising interest rates, a slowdown in China and the possibility of Britons voting in favour of leaving the European Union next week.
While most large Chinese banks including Industrial and Commercial Bank of China Ltd (HK:1398) and Agricultural Bank of China Ltd (HK:1288) trade at prices below their book value, PSBC plans to sell shares close to book value, the sources added.
"You could argue their (loan) portfolio is better than other banks, so asking for book value would be a fair price," a person close to the deal said.
PSBC, which has more than 40,000 branches nationwide, was set up as a deposit-taking bank in 2007, using the network of the former postal savings bureau.