HKCB Bank Holdings, a financial services unit owned equally by China Resources Enterprise and the Lippo Group, says it will raise about $1.63 billion by selling 150 million new shares at $10.925 each. Net proceeds after expenses will amount to $1.59 billion which will be used to expand the company's banking and life insurance businesses on the mainland and in Hong Kong. The company is understood to be planning the purchase of a significant stake in a mainland Chinese bank. Financial controller Kelvin Lo said the bank planned to use the funds to expand its life insurance business and its 40 per cent-owned subsidiary, China Mercantile Bank, on the mainland. The price represents a 5.8 per cent discount to yesterday's close of $11.60. The shares represent about 13.1 per cent of its issued share capital and 11.6 per cent of the company's enlarged capital. Its share price has risen 50 per cent in the past five weeks amid hopes of asset injections from China Resources Enterprise. HKCB controls the group's retail banking arm, Hongkong Chinese Bank, and has a 63.8 per cent stake in listed mortgage finance arm Hong Kong Building and Loan Agency. It also controls the group's merchant banking arm Lippo Asia and has a 50 per cent interest in Lippo Protective Life Insurance. After the placement, Lippo CRE (Financial Services) will own 61.2 per cent of HKCB, down from 69.2 per cent. Lippo CRE (Financial Services) is owned equally by Lippo China Resources - formerly Hongkong China - and China Resources Enterprise.