Chinese city commercial lender Bank Of Chongqing will launch an up to $593 million initial public offering in Hong Kong on Wednesday, IFR reported on Tuesday, citing sources with direct knowledge of the plan.

The offering consists of 707.5 million shares in a range of HK5.60 to HK$6.50 each, putting the total deal at up to HK$4.6 billion ($593 million), added IFR, a Thomson Reuters publication. Most of the funds will go to Bank of Chongqing, with a small portion going to China's National Social Security Fund, one of its shareholders.

The deal would be the first of several by Chinese city commercial lenders seeking to go public in Hong Kong to raise funds and bolster their balance sheet to cope with a surge in lending the past years. Similarly to Chongqing, other small- and medium-sized local banks have sought listings in Hong Kong after waiting several years for approval from the securities regulator in mainland China.

Chongqing had been pre-marketing the IPO to investors the past week and the deal's timing coincides with the listing of Huishang Bank Corp Ltd, which is seeking to raise up to $1.2 billion in Hong Kong. Huishang started meeting with investors about its deal on Oct. 21.

The Hang Seng H Financial index is down about 5.3 percent year-to-date, though it has soared nearly 20 percent since reaching a low for the year in early July, raising hopes over the valuations for banks looking to go public.

The indicative range for the Chongqing shares in the IPO are equivalent to a forecast price-to-book (P/B) ratio for 2013 of 0.88 to 0.99, added IFR. Regulations in China prevent banks from selling shares below a historical P/B ratio of 1, but the Chongqing deal can go ahead because its pricing reflects a forecast for 2013.

Upcoming banking deals in Hong Kong include the Huishang Bank IPO, an up to $2 billion listing by China Cinda Asset Management and offerings from China Everbright Bank and Harbin Bank.

Goldman Sachs and Morgan Stanley were hired as joint global coordinators of the Chongqing IPO, with ABC International, BoCom International, CCB International, China International Capital Corp also acting as joint bookrunners.

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