China's national pension fund has invested Rmb15bn ($2.2bn) in Agricultural Bank of China in preparation for an initial public offering that is expected to be the world's largest at about $30bn .

The Rmb777bn National Council for Social Security Fund is China's main national pension fund and has investments in all of the country's largest listed state-owned banks.

Agricultural Bank is planning to sell its shares by the end of July in both Hong Kong and Shanghai in a dual IPO that could raise a combined $30bn. This latest investment makes SSF the bank's third largest shareholder after the Ministry of Finance and China's sovereign wealth fund.

Under Chinese listing regulations, SSF will also automatically receive 10 per cent of the so-called "H shares" Agricultural Bank plans to list in Hong Kong at no extra cost.

According to an edict issued by China's cabinet last year, SSF is also supposed to receive 10 per cent of "A shares" sold by state-owned companies in IPOs in mainland China but the new rules are ambiguous over whether banks must also transfer these shares.

The banking regulator, Agricultural Bank and SSF were yesterday unable to confirm whether the pension fund would receive 10 per cent of the A shares the bank plans to sell in Shanghai.

Agricultural Bank was the last of China's large banks to be recapitalised by the state in preparation for restructuring and an eventual IPO and it is generally viewed in China as the worst-performing and worst-managed of all banks.

"It's ironic that the worst bank is able to conduct the largest IPO and raise the most money," according to Fraser Howie, author of Privatizing China: Inside China's Stock Markets . "And it's an incredible feat that the bank seems to be bringing forward plans to raise $30bn at a time of extreme uncertainty and weakness in global financial markets."

China's benchmark stock index has fallen more than 18 per cent since mid-April.

But despite market turmoil Agricultural Bank's IPO is expected to go ahead with support from a range of state-owned enterprises and institutions.

Analysts said China Life Insurance, Baosteel and possibly some large telecoms companies were all big potential state investors in the bank's IPO.

The SSF, established in 2000 to provide a pension fund of last resort, is rapidly expanding its contribution base. It expects to more than double its assets under management to about Rmb2,000bn in five years.

By the end of last year the fund had invested about 6.7 per cent, or Rmb52bn, of its total assets abroad but it has a mandate to invest up to 20 per cent of its capital overseas.