China Merchants Bank is discussing an overseas listing with international investment banks in a move that could raise over $1bn and swell the ranks of Chinese financial groups seeking to tap global capital markets.

The state-owned bank has reportedly been meeting potential advisers over the past few weeks and could decide on an overseas initial public offering this year. China Merchants, regarded as one of China's best-managed lenders, said it had not yet decided whether to proceed with a Hong Kong listing. However, a foreign banker involved in the discussions said yesterday: “All the big investment banks are competing for this mandate. Things are moving very fast and have picked up speed over the past few weeks.”