Pedestrians walk past a branch of Postal Savings Bank of China in Yichang city, central China's Hubei province, 7 January 2015.[Photo/IC]

State lender Postal Savings Bank of China Co's initial public offering will make it the largest in Hong Kong this year, but regulators' attitude toward its flotation remains to be an issue, said experts.

A source close to the company told China Daily that the bank's listing will raise about HK$78 billion ($10.1 billion), but the timetable has not been confirmed.

The company hopes it will be this year, but it depends on regulators' attitude and the market conditions.

Dong Dengxin, a researcher at Wuhan University of Science and Technology, said he has confidence in the IPO.

"As the capital market is steady and the liquidity is affluent, it is a good time for the Postal Savings Bank of China Co to go public, and I believe regulators will encourage it," said Dong.

Dong said Chinese investors are usually fond of new shares and the bank has advantages such as a large network of branches, but it has challenges because the commercial bank industry is experiencing slower growth.

"After the global financial crisis in 2008 and China's interest rate reform, Chinese commercial banks including the Postal Savings Bank of China can no longer rely on their traditional businesses, so they have to perfect their loans rather than seeking scale expansion," said Dong.

A founding partner of a Shenzhen-based investment company who declined to be named told China Daily that there are funds worth hundreds of billion yuan in Hong Kong, but their investment channels are limited.

"The company's innovative financing way can attract these funds," he said.

But he added he is not sure whether the IPO will be popular in capital markets because the business growth rates of commercial banks are slow and their bad loans can be a problem.

The Postal Savings Bank of China has more than 40,000 branches across the country, twice the size of the ICBC, the largest bank in China by assets.