One of China’s big state-owned banks hopes to raise a 30 billion yuan (USD$4.64 billion) via a private placement with one of its key affiliates for the purposes of improving its capital standing.
The Postal Savings Bank of China (PSBC) has announced that it plans to issue up to 5.406 billion shares via a non-public offering to China Post Group Corporation (邮政集团) for a consideration of up to 30 billion yuan.
Following the private placement PSBC’s total shares will increase to 92.384 billion from 86.979 billion, while China Post Group’s equity stake will increase to 67.3% from 65.3%.
On 29 January the China Securities Regulatory Commission (CSRC) issued its response opinions to PSBC’s fundraising plan, requiring further details on the share subscription volume, undertakings of affiliates to not reduce their holdings within six months of the private placement, as well as penalties incurred by PSBC within the past three years.
As of the end of September 2020 PSBC’s core tier-1 capital adequacy ratio was 9.51%, its tier-1 capital adequacy ratio was 11.81% and its capital adequacy ratio was 13.86%. Following the private placement these figures are expected to rise to 10.05%, 12.35% and 14.4% respectively.