Bank of China plans to raise as much as 60 billion yuan (HK$68.84 billion) in a rights offer in Hong Kong and Shanghai to replenish capital.
The bank will sell 1.1 shares for every 10 held, or as many as 19.56 billion shares in Shanghai and 8.36 billion in Hong Kong, it said in a statement to the Hong Kong stock exchange last night.
The rights issue takes the total of fund-raising announced by the mainland's five biggest state-controlled banks to as much as US$45.6 billion after they extended record loans last year to support a government-led stimulus plan.
The size of Bank of China's latest fund-raising is similar to a plan announced in March to issue up to 20 per cent of existing H shares. Last month, the lender completed the sale of 40 billion yuan in six-year bonds that can be converted into shares.
The lender's capital adequacy ratio fell to 11.09 per cent as of March 31, below the minimum 11.5 per cent required by the banking regulator after a lending spree last year when Beijing called on banks to help finance the four trillion yuan economic stimulus.
'The markets have assimilated the fund-raisings of the major Chinese lenders as they have already announced their plans. The major shareholder, Central Huijin, has also voiced support,' Haitong Securities analyst She Minhua said.
