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Agricultural Bank of China

AgBank gets regulator’s green light for US$15.6b private placement

Least capitalised of the mainland’s Big Five state-owned lenders plans to sell up to 27.5 billion shares to seven major institutions, including the Finance Ministry, Central Huijin Investment, and China National Tobacco

PUBLISHED : Tuesday, 29 May, 2018, 8:56pm
UPDATED : Tuesday, 29 May, 2018, 8:56pm

Agricultural Bank of China (AgBank) has been given the go-ahead from the mainland’s top securities regulator for its 100 billion yuan (US$15.6 billion) private placement, paying the way for what will be the country’s largest ever additional shares offering.

The nation’s third largest lender by assets received the approval from the listing committee of the China Securities Regulatory Commission (CSRC) for its replenishment of capital plan, the Beijing-based bank said in a filing to the Shanghai Stock Exchange late on Tuesday.

In March, Agricultural Bank – the least capitalised of the mainland’s Big Five state-owned lenders – said it planned to sell up to 27.5 billion shares to seven major institutions, including the Finance Ministry, Central Huijin Investment, and China National Tobacco, in a move that would help shore up its tier-one capital and boost capital adequacy.

AgBank plans US$16.8b recapitalisation drive alongside China banking regulatory move

The fundraising comes at a time when Chinese banks are embracing tighter regulatory measures to curb leverage levels and rein in the shadow banking sector, which will add to pressure on Chinese banks’ capital ratios, analysts have said.

China’s top financial regulators have vowed to give more leeway to lenders to replenish capital by way of more tools, channels and markets, investor eligibility and less red tape.

AgBank reported faster-than-expected annual profit growth of 4.9 per cent to 192.96 billion yuan in 2017, benefiting from its sprawling network to reach out to low-cost savings for funding.

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