BEIJING (Reuters) — When the world’s largest share listing takes place today, investors will be betting more on the China growth dream than on the credentials of Industrial & Commercial Bank of China, the country’s largest bank.With more customers than the combined population of England and France, and a loan book equivalent to around 20 percent of the nation’s gross domestic product, ICBC is a fitting proxy for the booming economy.

But punters expecting hefty gains on an offer likely to be worth almost $22 billion will have to close their eyes to what analysts say is a raft of structural weaknesses lingering at the bank, which was technically insolvent two years ago.

State-run ICBC was then saddled with bad loans exceeding 20 percent of total loans, only to be transformed last year by a $15 billion injection of state capital and an $85 billion carve-out of bad loans.

By the end of June, non-performing loans had dropped to 4.1 percent of the total.

“Our view is that it has been a very, very quick process,” said Charlene Chu, director of Fitch Ratings in China.

But just as ICBC’s branch customers still have to endure long queues, analysts say it could take well over a decade for the bank to match the best practices of its international peers despite efforts to reform.

Investors have clamoured for shares of Chinese banks as a proxy for economic growth of more than ten percent and a nascent consumer market of a billion people, sidelining weaknesses in the sector such as credit quality and lending practices.

“To some extent, investors seem to be overlooking a lot of what we would call fundamentals and concerns about risk management and some issues on the balance sheet,” Chu said.

The bank, whose shares are set to begin trading in Hong Kong and Shanghai on Friday, generated some $400 billion in orders for the Hong Kong portion of its deal, making it the city’s most popular IPO.

Frank Gong, chief Greater China economist at JPMorgan Chase, said he was amazed by the frenzy for Chinese bank IPOs despite the sector’s problems.

“The banking sector, to me, is still very weak and there are still a lot of challenges. The listing of the banks is the first step, not the end of the story,” he said.

ICBC was priced at 2.23 times its book value, in line with the average for global emerging market banks, UBS said.

Unlike its peers Bank of China and China Construction Bank, whose listings were overshadowed by scandals, ICBC has enjoyed a trouble-free run-up to its IPO.

Its prospectus tried to reassure investors it had never been involved in any entrusted loans to Fuxi Investment, a target of investigations in Shanghai into alleged misappropriation of social security funds.

But it issued a series of health warnings, including a possible inability to detect and prevent fraud and control credit risk, given sparse credit information available in China.

For analysts, including May Yan from Moody’s Investors Service in Hong Kong, ICBC’s reforms have borne fruit, but dangers may lurk in the bank’s risk controls and corporate governance, which are still being reformed.

If China’s racing economy were to hit a speed bump, the much-touted progress of ICBC and other Chinese banks in improving credit quality would be put to the test.

Loans that have not yet soured but are on special watch stood at an uncomfortable 9.2 percent of ICBC’s loan book in 2005.

“If there is any dramatic slowdown in the economy, from ten to say eight or seven percent, that may have an impact on asset quality,” Yan said.

Reforms including more sophisticated risk control systems and the creation of a board of directors will have been felt most at ICBC’s Beijing headquarters.

But it is unclear just how much has changed across ICBC’s network of 18,000 branches, where close ties between local bankers, party officials and businessmen mean politics rather than profit has often been the main motive behind loans.

Although ICBC’s independent directors include ex-Goldman Sachs official John Thornton, the bank acknowledged that its two biggest shareholders, the Ministry of Finance and Central Huijin, the investment arm of the central bank, would “have the ability to exercise significant influence over us.”