China Construction Bank likely to hold rights issue

Lender might follow its local peers in attempting to reduce capital ratios. 

China Construction Bank Corp. will likely propose a 0.7-for-10 rights issue to raise as much as CNY70 billion in Shanghai and Hong Kong, the Century Weekly magazine reported Monday, citing unnamed sources.

Bank of America Corp., which owns an 11% stake in the Chinese lender, has yet to decide on the size of its participation in the rights issue, the report said.

China Construction Bank's board will discuss the proposal April 29 when the bank issues its first-quarter results, according to an article in Market Watch.

The rights issue would follow fund-raising plans by peers Industrial & Commercial Bank of China Ltd. and Bank of China Ltd., after a lending binge last year reduced the lenders' capital ratios.