Published on ShanghaiDaily.com (http://www.shanghaidaily.com/)
http://www.shanghaidaily.com/sp/article/2008/200811/20081121/article_381449.htm
Pudong bank to go ahead with offering
Created: 2008-11-21 0:08:28
Author:Luo Jun
SHANGHAI Pudong Development Bank Co, part owned by Citigroup Inc, will proceed with a share offering plan as it aims to double assets to 2.5 trillion yuan (US$366 billion) in four years.
Pudong bank's investors yesterday approved the plan to sell up to 10 billion yuan of hybrid bonds with a maturity of at least 15 years and another 10 billion yuan of subordinated notes with a maturity of at least five years. The bank will resume a March plan to sell 800 million shares to boost its capital after it completes the bond sales, Chairman Ji Xiaohui said yesterday.
China is urging domestic lenders to strengthen capital, Bloomberg News said. Chinese banks' aggregate capital adequacy ratio climbed to 8.4 percent last year, above the mandatory minimum for the first time. The nation's 14 publicly traded lenders had a weighted average capital ratio of 12.58 percent by June 30, according to UBS AG.
The China Banking Regulatory Commission requires small and medium-sized banks to maintain a minimum capital ratio of 10 percent by the end of the year, Ji said yesterday. Smaller rival China Minsheng Banking Corp yesterday also won shareholders' approval to sell 5 billion yuan of hybrid bonds.
In addition, Pudong bank, in a statement to the Shanghai Stock Exchange yesterday, said rebates and recalculation of taxes for the previous two years will add 940 million yuan to net profit this year.
Concerns over China's slowing growth and a slump in the equity market caused the bank's shares to drop 64 percent this year. The stock jumped 7.5 percent on Wednesday to 14.76 yuan in Shanghai before trading was suspended for yesterday's shareholders meeting.
The stock sale is critical to Pudong Bank's target of raising its net income this year by 50 percent to 10 billion yuan, Ji said earlier.
Pudong bank's investors yesterday approved the plan to sell up to 10 billion yuan of hybrid bonds with a maturity of at least 15 years and another 10 billion yuan of subordinated notes with a maturity of at least five years. The bank will resume a March plan to sell 800 million shares to boost its capital after it completes the bond sales, Chairman Ji Xiaohui said yesterday.
China is urging domestic lenders to strengthen capital, Bloomberg News said. Chinese banks' aggregate capital adequacy ratio climbed to 8.4 percent last year, above the mandatory minimum for the first time. The nation's 14 publicly traded lenders had a weighted average capital ratio of 12.58 percent by June 30, according to UBS AG.
The China Banking Regulatory Commission requires small and medium-sized banks to maintain a minimum capital ratio of 10 percent by the end of the year, Ji said yesterday. Smaller rival China Minsheng Banking Corp yesterday also won shareholders' approval to sell 5 billion yuan of hybrid bonds.
In addition, Pudong bank, in a statement to the Shanghai Stock Exchange yesterday, said rebates and recalculation of taxes for the previous two years will add 940 million yuan to net profit this year.
Concerns over China's slowing growth and a slump in the equity market caused the bank's shares to drop 64 percent this year. The stock jumped 7.5 percent on Wednesday to 14.76 yuan in Shanghai before trading was suspended for yesterday's shareholders meeting.
The stock sale is critical to Pudong Bank's target of raising its net income this year by 50 percent to 10 billion yuan, Ji said earlier.
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