Update | Agricultural Bank, BOC to raise up to US$29b worth of preference shares
Other banks likely to seek approval to issue shares following Agricultural Bank and BOC
Agricultural Bank of China and Bank of China have been cleared to raise up to US$29 billion worth of preferred stock in a sector-wide push to meet international capital-adequacy requirements.
The China Banking Regulatory Commission approved BOC to issue 600 million onshore preferred shares worth up to 60 billion yuan (HK$75.6 billion) as well as US$6.5 billion worth of preferred shares in an offshore offering, the bank said in filings posted on the Hong Kong stock exchange website on Thursday night.
Agricultural Bank gained approval to issue 800 million preferred shares worth up to 80 billion yuan, it said in a separate filing.
Many Chinese banks have been thinking about how they can raise core capital
Earlier this year the two banks announced plans to raise a total of up to 300 billion yuan, a portion of which would be in preferred shares.
The funds would be added to the state-owned banks' tier-one capital as the mainland's biggest financial institutions seek to boost their capital-adequacy ratios before a 2018 deadline to fall in line with a set of international financial guidelines known as Basel III.
Industrial and Commercial Bank of China said last month it had been granted permission to issue up to 45 billion yuan of preferred shares domestically and up to 35 billion yuan worth of preferred shares offshore.
Other mainland banks were likely to seek approval to issue preferred stock, analysts said.