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Bank of China offer approved
By Zhang Fengming |
September 10, 2010, Friday
|
Print Edition
Print Edition
THE Bank of China has won regulatory approval for a rights offer in Shanghai and Hong Kong to replenish capital.
The China Banking Regulatory Commission has granted the go-ahead in principle, the fourth-biggest bank in China in terms of assets said in a stock exchange filing yesterday.
The Beijing-based bank gained approval from its shareholders in August to raise up to 60 billion yuan (US$8.8 billion) in a rights offer, just after it finished its convertible bonds sale of 40 billion yuan earlier this year.
The bank said it will issue up to 1.1 rights shares for every 10 existing shares.
Bank of China President Li Lihui said earlier that the bank hopes to complete its H-share rights offer by the end of the year.
Chinese banks are dashing to raise capital after a record credit boom in 2009. Banks in China extended a record 9.59 trillion yuan of new loans in 2009 - nearly double the 5 trillion yuan target. China's five biggest banks are all in the pursuit of capital this year.
In July, the Agricultural Bank of China raised US$22.1 billion as it executed an over-allotment option to surpass the Industrial and Commercial Bank of China as the world's biggest initial public offering.
The market is jittery about the large supply of shares and the lack of capital and the Shanghai Composite Index is the worst performing among the world's top 10 markets this year.
But banks need additional capital to extend their lifeline.
The China Banking Regulatory Commission has already warned it will curtail banks' expansion and limit their operations if they fail to meet capital adequacy requirements.
The Bank of China's capital adequacy ratio stood at 11.73 percent by the end of June, above the minimum 11.5 percent required by the China Banking Regulatory Commission.
The China Banking Regulatory Commission has granted the go-ahead in principle, the fourth-biggest bank in China in terms of assets said in a stock exchange filing yesterday.
The Beijing-based bank gained approval from its shareholders in August to raise up to 60 billion yuan (US$8.8 billion) in a rights offer, just after it finished its convertible bonds sale of 40 billion yuan earlier this year.
The bank said it will issue up to 1.1 rights shares for every 10 existing shares.
Bank of China President Li Lihui said earlier that the bank hopes to complete its H-share rights offer by the end of the year.
Chinese banks are dashing to raise capital after a record credit boom in 2009. Banks in China extended a record 9.59 trillion yuan of new loans in 2009 - nearly double the 5 trillion yuan target. China's five biggest banks are all in the pursuit of capital this year.
In July, the Agricultural Bank of China raised US$22.1 billion as it executed an over-allotment option to surpass the Industrial and Commercial Bank of China as the world's biggest initial public offering.
The market is jittery about the large supply of shares and the lack of capital and the Shanghai Composite Index is the worst performing among the world's top 10 markets this year.
But banks need additional capital to extend their lifeline.
The China Banking Regulatory Commission has already warned it will curtail banks' expansion and limit their operations if they fail to meet capital adequacy requirements.
The Bank of China's capital adequacy ratio stood at 11.73 percent by the end of June, above the minimum 11.5 percent required by the China Banking Regulatory Commission.
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