After HK$18.8b offering, bank says no need for fresh issues in next four years
China Merchants Bank does not need to sell more shares in the next four years to raise capital in the wake of last week's roughly HK$18.81 billion offering in Hong Kong, its chairman Qin Xiao said.
However, the mainland's sixth-largest commercial bank by assets, with more than 463 mainland branches and sub-branches, may sell subordinated debt to help bankroll its growth, including a plan to add another 50 branches annually in coming years, said Mr Qin.
The Shenzhen-based national lender is expected to decide as soon as today to exercise a 10 per cent over-allotment option that will boost the total take from its H-share sale to HK$20.69 billion.
The IPO proceeds boosted CMB's capital adequacy ratio to 11 per cent of which nine percentage points consists of equity, well above the regulatory minimum of four per cent. A bank's total capital adequacy ratio must be at least 8 per cent under domestic and international standards.
The 19-year-old lender is widely regarded as the mainland's best-managed bank.
Though its network is tiny compared with those of the Big Four state-owned lenders, analysts said its branches are more profitable since they are typically located close the wealthy retail customers in affluent regions that it targets.
