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SCMP Reporter

China Everbright Bank has decided to expand its share capital by 3.1 billion yuan (about HK$2.9 billion) to pave the way for an eventual listing on mainland stock exchanges.

Since 1997 the bank has authorised a series of capital expansions.

According to an announcement made yesterday by the bank, new legal person shares will be offered to existing shareholders and selected small and medium-sized enterprises.

Other legal person entities that meet conditions set out in the central bank's Provisional Regulations on Financial Institution Investment can also apply for the new shares, which will be priced at 1.95 yuan a share and be issued in minimum lots of 5.5 million.

If successfully placed, the issue would see the bank's share capital more than double, from 2.8 billion yuan to 5.9 billion.

The placement will increase its capital adequacy ratio from 6.9 per cent to 10.3 per cent, putting it over the 8 per cent threshold required of banks seeking mainland stock market listings.

China Everbright Bank has said it hopes to list either next year or in 2002. Seven other privately held banks have also expressed an interest in listing.

China Everbright Bank will use 600 million yuan of the fresh capital to establish new branches and upgrade existing representative offices - including its Hong Kong representative office - to full branch status. The bank is 20 per cent held by Hong Kong-listed China Everbright.

Another 1.2 billion yuan will be invested to upgrade the bank's electronic and fixed-asset infrastructures.

Although China's sixth-largest lender, it is still a minnow when compared with the Agricultural Bank of China, Bank of China, Construction Bank of China and Industrial & Commercial Bank of China - whose networks sprawl across the country.



Sixth-largest lender in capital expansion