BoCom eyes bonds if necessary
By Zhang Fengming |
June 22, 2010, Tuesday
|
Print Edition
Print Edition
THE Bank of Communications may issue bonds to replenish capital after it cuts its rights issue by one-fifth, a senior banker said yesterday.
"Our rights issue plan is sufficient to support our growth for three years, so we don't need to make additional issue within the period," Dicky Yip, executive vice president of BoCom, said on sidelines of a symposium.
He said the bank may issue bonds if necessary.
On June 6, Shanghai-based BoCom, China's fifth-largest bank, said it was cutting its rights issues in Shanghai and Hong Kong to 33.1 billion yuan (US$4.85 billion) from 42 billion yuan initially announced in February.
Qian Wenhui, an executive vice president of the bank, blamed "market conditions" then for the cut. The key Shanghai Composite Index has lost more than 20 percent so far this year to be the worst performing index among the world's 10 major markets.
BoCom needs fresh capital after it extended a sizzling 511 billion yuan of new loans in 2009, more than double the amount it lent in 2008. The loans trimmed BoCom's capital adequacy ratio by 1.47 percentage points to 12 percent at the end of 2009 from a year earlier, just above the regulatory minimum of 11 percent for state-owned banks.
BoCom's core CAR, comprising equity capital, fell to 8.15 percent from 9.54 percent a year earlier.
"Our rights issue plan is sufficient to support our growth for three years, so we don't need to make additional issue within the period," Dicky Yip, executive vice president of BoCom, said on sidelines of a symposium.
He said the bank may issue bonds if necessary.
On June 6, Shanghai-based BoCom, China's fifth-largest bank, said it was cutting its rights issues in Shanghai and Hong Kong to 33.1 billion yuan (US$4.85 billion) from 42 billion yuan initially announced in February.
Qian Wenhui, an executive vice president of the bank, blamed "market conditions" then for the cut. The key Shanghai Composite Index has lost more than 20 percent so far this year to be the worst performing index among the world's 10 major markets.
BoCom needs fresh capital after it extended a sizzling 511 billion yuan of new loans in 2009, more than double the amount it lent in 2008. The loans trimmed BoCom's capital adequacy ratio by 1.47 percentage points to 12 percent at the end of 2009 from a year earlier, just above the regulatory minimum of 11 percent for state-owned banks.
BoCom's core CAR, comprising equity capital, fell to 8.15 percent from 9.54 percent a year earlier.
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