China Minsheng Banking Corp. (1988), the nation’s first non-state lender, is set to sell shares at HK$6.79 each in a Hong Kong offering, according to a person familiar with the matter.
The person declined to be identified as the process is private. The Beijing-based bank planned to raise as much as HK$11.3 billion ($1.45 billion), offering 1.65 billion shares at HK$6.65 to HK$6.86 apiece, according to terms for the deal obtained by Bloomberg News.
A call to the lender outside of regular business hours wasn’t answered.
Minsheng joins local rivals Bank of Communications Co. and Industrial Bank Co. (1398) in seeking funds after a two-year, $2.7 trillion lending spree weakened their finances. China’s banking regulator is planning tougher capital requirements for lenders to fend off rising credit risks.
The China Banking Regulatory Commission said in August that it would require the country’s largest, or so-called systemically important, lenders to have a minimum capital adequacy ratio of 11.5 percent by the end of next year. Smaller banks would be required to have at least 10.5 percent under “normal conditions” by the end of 2016, the CBRC had said.
Minsheng’s capital adequacy ratio stood at 10.86 percent as of Dec. 31, while the core ratio was 7.87 percent. Both are the lowest among the nine publicly-traded Chinese lenders listed in Hong Kong.
The lender, which has about 590 outlets nationwide, was founded in 1996 by pig-feed tycoon Liu Yonghao and some of China’s wealthiest businessmen. The bank has boosted profit by an average 50 percent since 2007 by focusing on smaller enterprises. Profit surged 59 percent to 27.9 billion yuan last year on higher income from lending and fee-based services.
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