China’s Industrial Bank plans to raise up to $2.64 billion, to boost its capital
20 May 2010
China's Industrial Bank Co plans to raise up to 18 billion yuan ($2.64 billion) through a rights issue to boost its capital, the bank said today.
The bank will issue two shares for every 10 held at 18 yuan each at a 35-per cent discount to its closing price on Wednesday, it said in a statement.
In November 2009, Fuzhou-based Industrial Bank had announced plans to raise 18 billion yuan through a rights offer to replenish capital depleted by swelling loan growth and also plans to increase supplementary capital by selling hybrid or convertible bonds after the rights offer.
Chinese banking regulators have been putting pressure on the banks to raise more capital and tone down their growth in lending, thereby maintaining the credit boom and sustained economic growth.
Lending by most Chinese banks soared this year with the banks' capital stagnating resulting in a decline in their capital adequacy ratios.
Industrial bank said its capital adequacy ratio at the end of 2009 was 10.75 per cent, just under China's banking regulatory commission's capital adequacy requirement for large banks is 11 per cent.
