Construction Bank sent the banks letters Friday confirming the appointments, three months after they made presentations in Beijing to win the business, said the bankers, who asked not to be identified.

Construction Bank and Morgan Stanley are the biggest shareholders of China International Capital. Deutsche Bank AG and J.P. Morgan Chase & Co. also competed to manage the IPO.

Investment banks are chasing underwriting fees worth about US$450 million as China plans to sell more than US$15 billion of stocks including banks, airlines and telecommunications companies this year. Construction Bank's sale may generate US$175 million in fees, based on a standard 3.5 percent commission.

"They have to get these deals,'' said Enzio von Pfeil, a former investment banker now running Commercial Economics Asia Ltd. in Hong Kong. "It'll be tougher for the houses to get other deals if they don't get these big ones.''

The banks sent their most senior executives and counselors to win the business. Former U.S. Treasury Secretary Robert Rubin, chairman of Citigroup's executive committee, helped host a Citigroup seminar for Construction Bank in Beijing in January.

Citigroup's chief executive Charles Prince has been to China twice this year and Stanley Fischer, a former International Monetary Fund official and vice chairman of the bank's executive committee, also attended the January seminar.

Former U.S. Secretary of State Henry Kissinger accompanied J.P. Morgan chief executive William Harrison on a November trip to the Chinese capital to meet Construction Bank president Zhang Enzhao.

German Chancellor Gerhard Schroeder sent a letter to Premier Wen Jiabao asking China to give Deutsche Bank a role in Construction Bank's sale, said people familiar with the letter, asking not to be identified.

Construction Bank's sale may be the biggest in the world this year and the biggest IPO in Asia outside Japan since China Unicom Ltd. raised US$5.65 billion in June 2000.

Citigroup ranked third among arrangers of equity share sales by Chinese companies to overseas investors last year. China International ranked second behind Credit Suisse First Boston. Morgan Stanley was in fifth.

Construction Bank's sale will determine the pace of fund raising by China's three other biggest banks -- Bank of China, Industrial and Commercial Bank of China and Agricultural Bank of China -- are among lenders accounting for 80.74 percent of all lending in the nation of 1.3 billion people at the end of last year.

Preparing a Chinese bank for an IPO is one of the biggest challenges for the government and banks handling the sale, investors and regulators say.

The four biggest banks are burdened with combined bad loans estimated at more than a fifth of total lending, or 1.92 trillion yuan (US$232 billion) at the end of 2003, according to the China Banking Regulatory Commission.

The government injected US$45 billion into Bank of China and Construction Bank at the end of last year as part of a pilot program to reorganize, recapitalize and sell shares in the country's four biggest State-owned banks.

The bailout enabled Construction Bank to reduce its bad-loan ratio to 4 percent, the best of the big four, the country's top banking regulator, Liu Mingkang, said last week.

"The IPO is indicative of China's accelerating banking reform, as this is the only way to boost corporate governance and introduce modern banking practices,'' said Bill Sung, who helps manage about US$600 million in Asia excluding Japan at CDC IXIS Asset Management in Singapore.