BOC seeks bonds sale to raise its capital
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The Bank of China wants to issue convertible bonds as soon as possible as part of fundraising efforts to replenish capital after a lending spree in 2009, the bank said yesterday.
The bank also hopes to complete its new H-share issue by the end of this year, its President Li Lihui said yesterday.
China's securities regulator this month granted preliminary approval to the bank to sell up to 40 billion yuan convertible bonds which can be converted into yuan-backed A shares.
BOC, the country's biggest foreign exchange bank, is among a number of Chinese banks lining up to raise capital through new share offerings or bond sales to plug a capital shortage due to loan growth in 2009.
Lenders, including the Bank of Communications and China Construction Bank, have announced plans to replenish capital.
China Construction Bank said it may delay its fundraising plans until early next year due to uncertain market conditions.
Banks in China extended a record 9.59 trillion yuan (US$1.4 trillion) of new loans in 2009 - nearly double the 5 trillion yuan target.
The China Banking Regulatory Commission has already warned it will curtailed banks' expansion and limit their operations if they fail to meet capital adequacy requirements. The big-five state-owned banks are required to meet a minimum of 11 percent.
BOC's capital adequacy fell to 11.14 percent at the end of 2009. The Beijing-based lender suspended trading in Shanghai yesterday.
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