FEW companies are able to go public with a valuation of more than $50 billion less than a decade after their founding. This rarefied group, which mainly consists of tech darlings, is about to admit a surprising new member: a large, lumbering Chinese bank. Postal Savings Bank of China, established in 2007, is on course for an initial public offering (IPO) this year that is expected to be the world’s biggest for nearly two years. Its pitch to prospective investors is also unusual. Far from boasting about how well it is run, it instead emphasises the advantages of scale—which it has so far squandered—to imply that it has vast untapped potential.
Describing Postal Savings Bank as a startup is something of a misnomer. When it launched nine years ago, it was a spin-off from the Chinese postal service, which had doubled as a quasi-bank for 20 years. As a way of bringing finance to rural areas, the government set up windows at post offices for locals to deposit their savings, a model that lots of other countries had previously followed.
In many small villages in China, the postal bank is…Continue reading