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People's Daily Online>>China Business

ICBC begins two-day bond sale to bolster capital

By Wang Xiaotian (China Daily)

08:19, December 30, 2011

BEIJING - Industrial & Commercial Bank of China Ltd (ICBC), the world's biggest commercial bank by market value, kicked off a two-day sale of subordinated bonds valued at 50 billion yuan ($7.9 billion) to replenish its capital on Thursday.

The sale consists of 10-year bonds valued at 10 billion yuan and 15-year securities of 40 billion yuan, according to a statement posted on Chinabond.com, the nation's major debt clearing house.

ICBC sold subordinated bonds worth 38 billion yuan in June. Adding in the 50 billion yuan, the lender has raised a total of 88 billion yuan in bond sales this year.

In November, ICBC shareholders approved plans to raise as much as 70 billion yuan through bond sales by the end of June 2012, which means it will probably sell bonds totaling 20 billion yuan before that date.

Yang Kaisheng, ICBC's president, said in November that the bank doesn't have any other equity-financing plan.

At the end of September, ICBC registered a capital-adequacy ratio (CAR) of 12.51 percent and a core CAR of 10.03 percent.

The government's new tougher level for major lenders' CAR is 11.5 percent. The requirement for core CAR stands at 9.5 percent. The regulations are scheduled to take effect at the beginning of 2012.

Facing higher capital requirements, increased lending due to relatively looser credit controls next year, and declining deposits, banks have been seeking to raise more capital through all available channels.

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