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Bank said to rope in investor
By Zhang Fengming |
February 27, 2010, Saturday
|
Print Edition
Print Edition
SHANGHAI Pudong Development Bank halted trading in its shares yesterday as it is involved in talks to rope in China Mobile as a strategic investor, Guotai Jun'an Securities Co said.
Pudong Bank will post more details and resume trading, possibly, next Thursday, the lender said in a filing to the Shanghai Stock Exchange yesterday.
"Pudong Bank's suspension of trading is mainly due to its talks with China Mobile on a share sale plan," Wu Yonggang, a Guotai Jun'an Securities Co analyst, said yesterday.
The mid-sized bank, partly owned by Citigroup Inc, has plans to issue 2.2 billion shares to China Mobile through a private placement which is expected to raise 40 billion yuan (US$5.86 billion), Wu said.
"The placement plan will boost the bank's performance in the A-share market and will benefit the bank's development," he said.
The placement will help boost Pudong Bank's tier-1, or core, capital adequacy ratio by 4 percentage points to 10 percent, Wu estimated. The bank's overall CAR, the main gauge of a lender's financial strength, will increase close to 14 percent, which will be able to support its stable expansion over three years, he said.
Pudong Bank declined to comment on Wu's note yesterday.
Chinese banks are lining up to raise capital through offers of new shares, bond sales or private placement to plug a capital shortage due to their aggressive lending last year.
Since late January, the Bank of China, China Merchants Bank, Hua Xia Bank and the Bank of Communications have all announced plans to raise capital.
Pudong Bank earlier said its total lending jumped 33 percent year on year to 928 billion yuan in 2009.
Its revenue rose 5.3 percent to 36.4 billion yuan in 2009, it said in a preliminary earnings report in January.
Its bad loan ratio was 0.8 percent at the end of last year, down 0.4 percentage point from a year earlier.
Pudong Bank will post more details and resume trading, possibly, next Thursday, the lender said in a filing to the Shanghai Stock Exchange yesterday.
"Pudong Bank's suspension of trading is mainly due to its talks with China Mobile on a share sale plan," Wu Yonggang, a Guotai Jun'an Securities Co analyst, said yesterday.
The mid-sized bank, partly owned by Citigroup Inc, has plans to issue 2.2 billion shares to China Mobile through a private placement which is expected to raise 40 billion yuan (US$5.86 billion), Wu said.
"The placement plan will boost the bank's performance in the A-share market and will benefit the bank's development," he said.
The placement will help boost Pudong Bank's tier-1, or core, capital adequacy ratio by 4 percentage points to 10 percent, Wu estimated. The bank's overall CAR, the main gauge of a lender's financial strength, will increase close to 14 percent, which will be able to support its stable expansion over three years, he said.
Pudong Bank declined to comment on Wu's note yesterday.
Chinese banks are lining up to raise capital through offers of new shares, bond sales or private placement to plug a capital shortage due to their aggressive lending last year.
Since late January, the Bank of China, China Merchants Bank, Hua Xia Bank and the Bank of Communications have all announced plans to raise capital.
Pudong Bank earlier said its total lending jumped 33 percent year on year to 928 billion yuan in 2009.
Its revenue rose 5.3 percent to 36.4 billion yuan in 2009, it said in a preliminary earnings report in January.
Its bad loan ratio was 0.8 percent at the end of last year, down 0.4 percentage point from a year earlier.
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