China Minsheng Banking Corp is looking to raise 21.5 billion yuan (HK$25.21 billion) through a private placement of A shares to boost its capital adequacy ahead of the expected introduction of higher capital requirements.
The Beijing-based lender said in a statement it would place 4.7 billion A shares to seven shareholders including China Life Insurance and Sichuan South Hope Industrial at 4.57 yuan a share, which represented a discount of 9.1 per cent to the stock's close of 5.03 yuan on Thursday.
All the proceeds raised from the placement would be used to replenish its capital. The placement is subject to shareholders' and regulators' approvals.
The fund-raising comes 14 months after the bank's listing in Hong Kong, which netted more than HK$30 billion.
'The banking regulator will heighten capital levels required of banks,' Shenyin Wanguo Securities analyst Li Yamin said. 'Those banks with the need to boost capital have to seek fresh funds ahead of the official announcement [of a higher capital requirement].'
The China Banking Regulatory Commission said earlier it would raise the capital requirement in line with the global Basel III accord reached in September last year, which required banks to increase tier-1 capital ratio to 8.5 per cent from 4 per cent.
