China's top banks secure approval to raise $42bln

Country’s cabinet gives nod to 4 biggest listed lenders to use securities market in replenishing capital.

China's cabinet has approved proposals by the nation's four biggest listed banks to raise CNY287 billion ($42 billion) from the securities markets, the National Business Daily reported Thursday, citing unnamed sources.

The cabinet's approval comes after Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Bank of China Ltd. and Bank of Communications Co. have in recent months announced fund-raising plans to replenish their capital.

The cabinet approved China Construction Bank and Bank of Communications' plans to raise funds by conducting rights issues in Shanghai and Hong Kong. China Construction Bank plans to raise CNY75 billion ($10.98 billion), while Bank of Communications plans to raise CNY42 billion ($6.15 billion).

The cabinet also said ICBC could raise up to CNY70 billion ($10.25 billion), while Bank of China can raise up to CNY100 billion ($14.64 billion), according to the report.

ICBC said earlier it plans to sell as much as CNY25 billion ($3.66 billion) worth of bonds convertible into its Shanghai-listed shares and to issue additional shares in Hong Kong, and Bank of China said it plans to raise as much as CNY40 billion ($5.86 billion) from a convertible bond sale in Shanghai and to sell additional shares in Hong Kong.

View the full story in the Wall Street Journal.