Bank of Communications (BoCom) (601328, 3328.HK) moved to boost its capital adequacy ratio, announcing plans to raise up to 56.6 billion yuan from a private placement of 6.54 billion A shares at 4.55 yuan per share, and 5.84 billion H shares at HK$5.63 per share, reports China Securities Journal, citing a company filing.
Subscribers to the A share private placement include the Finance Ministry, the National Council for Social Security Fund, Ping An Asset Management, FAW Group, and three domestic tobacco companies.
The Ministry of Finance, HSBC Holdings (0005.HK), the National Council for Social Security Fund, Best Investment Corporation, China Life Insurance Overseas, China RE Asset Management, and New China Life Insurance (601336,1336.HK) will subscribe to the H share private placement.
The Ministry of Finance will spend 15 billion yuan to subscribe to 2.53 billion A shares and 759 million H shares, raising its shareholding in the bank from 26.52 percent to 26.53 percent.
HSBC will subscribe to 2.36 billion H shares for HK$13.3 billion, leaving its stake in BoCom unchanged at 19.03 percent.
The National Council for Social Security Fund will invest 15 billion yuan to subscribe to 1.88 billion A shares and 1.41 billion H shares, upping its shareholding in the fifth-largest Chinese lender from 11.36 percent to 13.88 percent.
According to BoCom, the participation of the Finance Ministry, the National Council for Social Security Fund, and HSBC in the private placement will enable it to quickly raise funds and reduce its impact on the secondary market.
The China Banking Regulatory Commission rolled out new capital adequacy requirements last year, and major banks will be required to have a minimum capital adequacy ratio of 11.5 percent by the end of 2013, while the requirement for smaller banks is 10.5 percent by the end of 2016.
BoCom reported capital adequacy ratio of 9.24 percent at end September 2011.