Banks battle for slice of China float

A BITTER struggle is under way between the world's top investment banks for the mandate to manage the multi-billion dollar listing of China Construction Bank (CCB), one of the country's largest lenders.

It is understood HSBC, Citibank, Deutsche Bank, Morgan Stanley and JP Morgan are going head-to-head for work on the prized listing, which could raise $5bn (£2.7bn).

The winner, or winners, would get to share lucrative deal fees of up to $175m. They may also win greater confidence from Beijing policymakers and possibly gain an edge in securing further work.

Some banks have rolled out high-profile names on their boards to bolster commercial appeal while pitching in China. Citigroup reportedly deployed former US Treasury Secretary Robert Rubin, while JP Morgan is understood to have called on Henry Kissinger, Secretary of State in the Nixon administration.

CCB's listing is part of Beijing's efforts to modernise its financial sector as China opens up to foreign competition, honouring itsWorld Trade Organisation commitments. Rules barring foreign banks from taking local-currency deposits will be lifted in 2006.

But critics say all the big State banks, including CCB, are burdened with a mass of non-performing loans and are, by Western standards, inefficient. This month, Beijing injected $22.5bn into CCB from its foreign exchange reserves to help dress up its balance sheet.