(30 August 2012 – China) China’s fifth-largest bank, Bank of Communications Ltd (BoCom) raised the US$4.7 billion (A$4.5 billion) to meet the government’s capital adequacy ratio requirement.BoCom raised the amount by selling Shanghai-listed A-shares through a private placement.
A total of 6.5 billion A-shares were issued at CNY4.55 (A$0.69) per share, which will increase the bank’s core capital adequacy ratio to 10.31 percent. China’s Ministry of Finance bought 2.5 billion A-shares via placement.
BoCom had a core capital adequacy ratio of 9.24 percent at the end of the third quarter in 2011, down from 9.37 percent in 2010.
The private placement will help BoCom supplement its core capital, increase its capital adequacy and promote the long-term sustainability of its various businesses.
Major state-owned banks like BoCom are required to have a minimum 9.5 percent core capital adequacy ratio by 2013 to limit risks from certain assets such as mortgage loans.
BoCom in March, however, said it was planning a share placement of both A- and H-shares. Analysts said they expected the bank to raise as much as US$6.3 billion (A$6.0 billion) on a combined basis. There has been no word on the progress of its H-share placement.