Ag. Bank of China issues $6.45b in pref shares

Agricultural Bank of China completes the second part of a total Rmb80 billion capital-raising exercise; ICBC is expected to be next as banks beef up their balance sheets.

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...

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