Industrial Bank seeking 26 billion yuan in private share sale

[SHANGHAI] China's Industrial Bank Co plans to raise as much as 26 billion yuan (S$5.3 billion) in a private stock placement to replenish core Tier-1 capital.

The lender, based in the southeastern city of Fuzhou, will sell as many as 1.72 billion shares at 15.1 yuan each to six investors, it said in a Friday filing to Shanghai stock exchange. Buyers include the Fujian province's finance bureau, which is the bank's largest shareholder, and China National Tobacco Corp, according to the filing.

The company's Shanghai-traded stock will resume trading Aug 1, a separate filingshowed. It last traded on July 22 at 15.46 yuan.

Slowing profit growth at China's lenders has curbed their ability to retain earnings to meet capital requirements, forcing them to raise funds by selling shares and bonds. China's banking regulator requires smaller lenders such as Industrial Bank, which are classified as "non-systemically important," to have a minimum capital adequacy ratio of 10.5 per cent by the end of 2018.

Industrial Bank is targeting an overall buffer of at least 10.8 per cent by the end of 2018, it said in the filing. For its core Tier-1 capital ratio, which measures its ability to absorb losses, the bank said it's aiming for 7.8 per cent by that time.

BLOOMBERG