Bank of Communications Ltd said it has raised US$4.7 billion to meet the government’s capital adequacy ratio requirement.
China's fifth-largest bank raised the amount by selling Shanghai-listed A-shares via a private placement. It issued 6.5 billion A-shares at CNY4.55 per share, which will increase the bank's core capital adequacy ratio to 10.31%. China’s Ministry of Finance bought 2.5 billion A-shares via placement.
BoCom had a core capital adequacy ratio of 9.24% at the end of the third quarter in 2011, down from 9.37% 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% 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 on a combined basis. There has been no word on the progress of its H-share placement.
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