China Everbright Bank, the country's 11th-largest lender, plans to raise 11.4 billion yuan (HK$12.93 billion) in a private share placement before seeking an A-share initial public offering. The bank said yesterday it planned to sell 5.2 billion shares at 2.20 yuan each to institutional investors including Shanghai Chengtou Holding and Guangdong Provincial Expressway Development. Shanghai Chengtou, the city's water supplier, will pay 792 million yuan for 360 million shares in the lender, while Guangdong Expressway will buy 240 million shares for 528 million yuan. It is not known if the bank will seek a Hong Kong listing. It has been meeting state-owned enterprises since January, and the deal will allow it to replenish capital to meet listing requirements in the A-share market. After receiving the approval of the China Securities Regulatory Commission, the bank said it would seek a listing as soon as possible. The central government injected 20 billion yuan into the loss-making bank in November 2007 as part of a restructuring. The bank wants to sell 10 to 20 per cent of its equity to the public and submitted the plan to regulators in June last year. The shares will not be sold to foreign institutional investors. Beijing is becoming shy of international banks after Bank of America Corp, UBS and other strategic investors sold their stakes in mainland banks as the global financial crisis developed. 'The fund will be used to boost our core capital,' Everbright said. 'The fund-raising will help our capital adequacy ratio exceed 10 per cent and core capital adequacy ratio surpass 7 per cent.' That would meet the banking regulator's requirements and solve the capital shortage that has restricted development, the lender said. The bank's capital adequacy ratio, a key measure of financial health, may have dropped to 9 per cent from 9.1 per cent at the end of last year after the lender paid its first dividend in six years. One state company approached by the bank said it had decided not to invest in Everbright because 'its asset quality was not so good'. 'However, the price of 2.20 yuan seems reasonable,' said an official. Net assets of the bank stood at 851.8 billion yuan at the end of last year. It had outstanding loans of 468.5 billion yuan and deposits of 625.9 billion yuan. The bank made 7.32 billion yuan in net profit last year, up 45 per cent year on year. It expects net earnings to remain at the same level and its non-performing loan ratio to be 2.5 per cent this year. The average non-performing loan ratio of mainland banks was 1.77 per cent at the end of last month. The CSRC resumed approving listings last month after halting initial share sales in September last year following a stock market rout. The Shanghai Composite Index has rallied 81.05 per cent this year, making it the second-best performer among the world's primary indices.