Chong Hing Bank raises capital for mainland push

Hong Kong-listed lender Chong Hing Bank launched a HK$3.71 billion $478 million rights issue on Monday in a bid to finance expansion on the mainland and bolster its capital base.

The deal, which represents 50% of the bank’s issued share capital, leaves existing shareholders facing heavy dilution, but potentially benefitting from considerable upside if the bank can successfully leverage its parent’s connections to push further into Guangdong Province.

In February 2014, Chong Hing began to transform itself from being a small family-owned Hong Kong-based bank after Yuexiu Financial Holdings purchased a 75% stake for $1.5 billion in a deal valued at 2.08 times book value....