THE securities regulator has approved the nation’s first initial public offering (IPO) by a trust company in more than two decades.

    Shandong International Trust Co. won approval from the China Securities Regulatory Commission (CSRC) to sell as many as 676.5 million shares in a Hong Kong IPO, according to one of its shareholders, Luxin Venture Capital.

    Shandong International Trust plans to seek about US$300 million from the sale, sources said early last year.

    Domestic trust firms, with 18 trillion yuan (US$2.6 trillion) in assets under management as of September, pool money from wealthy investors to buy assets from stocks and bonds to art and wine as well as finance projects.

    The industry’s expansion has been fueled by demand from corporate borrowers that have difficulty getting loans from banks, as well as investors eager for products with higher returns, putting it among the fastest-growing segments of China’s shadow banking system.

    The most recent listings from a Chinese trust company were in 1994, when Shaanxi International Trust Co. and Anxin Trust Co. sold shares in the domestic market, according to stock exchange data.

    The industry has gone through the ups and downs of six periods of industry overhaul since the 1979 establishment of China International Trust & Investment Co. by the late Vice President Rong Yiren. Their functions have evolved from central and local governments’ borrowing arms to loan issuers and asset managers. (SD-Agencies)