Agricultural Bank of China ABC has completed the offering of Rmb40 billion $6.45 billion in preference shares. This follows another Rmb40 billion capital raising via the public offering of pref shares in November.
The second of two planned capital-raising exercises boosts the tier-1 capital adequacy ratio CAR at ABC by 83bps to 91bps, according to estimates in three separate research reports by a trio of Chinese brokers. As of end September, ABC’s tier-1 CAR was 8.89%. It is China’s third-largest lender by assets.
Analysts view the benefit of additional capital as outweighing any negative dilution experienced by existing shareholders.
“Despite a minor dilution...