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ICBC seeks 45b yuan rights issue
By Zhang Fengming |
July 29, 2010, Thursday
|
Online Edition
Online Edition
INDUSTRIAL and Commercial Bank of China plans to raise up to 45 billion yuan (US$6.6 billion) as the last among the big five banks to shore up capital.
The world's biggest bank in terms of market value proposed a 0.6-for-10 rights issue to existing shareholders, or up to 15.06 billion shares in Shanghai and 4.98 billion in Hong Kong, the lender said in a statement to the Shanghai Stock Exchange today.
The plan, approved by the board, is pending regulatory and shareholder approval. The bank will hold a shareholder meeting in Beijing on September 15 on the rights offer.
The rights offer is aimed to ensure the healthy development of its business to boost its competitiveness, to add its ability against risks and sustain profit growth, the bank said.
The bank's capital adequacy ratio, the main gauge of bank's financial strength, fell to 11.98 percent as of March 31.
China's top banking regulator said earlier it requires a minimum capital adequacy ratio of 11 percent for major state owned lenders but analysts speculate this may have unofficially risen to 11.5 percent.
The bank is among a fleet of Chinese banks to raise capital after a record 9.6 trillion yuan (US$1.4 trillion) of new loans in 2009.
"The theme of 2010 for banks is capital raising," said She Minhua, a Haitong Securities Co analyst.
Earlier this month, Agricultural Bank of China made its debut on Shanghai and Hong Kong with a US$19.2 billion dual listing.
The other three of the big five state-owned banks, Bank of Communications, China Construction Bank and Bank of China, all have posted their capital-raising plans. They could raise up to 417 billion yuan.
The rights issue came against a depressed market sentiment. The benchmark Shanghai Composite Index lost 22 percent this year as the worst performing market among the world's 10 major markets.
ICBC also plans to privatize Hong Kong-listed unit ICBC (Asia), it said without elaborating. The bank will disclose more details after regulators' review.
The bank today ended flat at 4.36 yuan in Shanghai. The benchmark Shanghai Composite Index gained 0.5 percent to 2,648.12.
The world's biggest bank in terms of market value proposed a 0.6-for-10 rights issue to existing shareholders, or up to 15.06 billion shares in Shanghai and 4.98 billion in Hong Kong, the lender said in a statement to the Shanghai Stock Exchange today.
The plan, approved by the board, is pending regulatory and shareholder approval. The bank will hold a shareholder meeting in Beijing on September 15 on the rights offer.
The rights offer is aimed to ensure the healthy development of its business to boost its competitiveness, to add its ability against risks and sustain profit growth, the bank said.
The bank's capital adequacy ratio, the main gauge of bank's financial strength, fell to 11.98 percent as of March 31.
China's top banking regulator said earlier it requires a minimum capital adequacy ratio of 11 percent for major state owned lenders but analysts speculate this may have unofficially risen to 11.5 percent.
The bank is among a fleet of Chinese banks to raise capital after a record 9.6 trillion yuan (US$1.4 trillion) of new loans in 2009.
"The theme of 2010 for banks is capital raising," said She Minhua, a Haitong Securities Co analyst.
Earlier this month, Agricultural Bank of China made its debut on Shanghai and Hong Kong with a US$19.2 billion dual listing.
The other three of the big five state-owned banks, Bank of Communications, China Construction Bank and Bank of China, all have posted their capital-raising plans. They could raise up to 417 billion yuan.
The rights issue came against a depressed market sentiment. The benchmark Shanghai Composite Index lost 22 percent this year as the worst performing market among the world's 10 major markets.
ICBC also plans to privatize Hong Kong-listed unit ICBC (Asia), it said without elaborating. The bank will disclose more details after regulators' review.
The bank today ended flat at 4.36 yuan in Shanghai. The benchmark Shanghai Composite Index gained 0.5 percent to 2,648.12.
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