Guangfa Bank Seeks to Raise 40B Yuan via New Share Issue in Anticipation of Inclusion as Systemically Important Bank

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Guangzhou-headquartered commercial lender China Guangfa Bank has unveiled plans for a new share issue to shore up its capital levels.

Guangfa Bank has just announced that it will seek to raise up to 40 billion yuan via a public share issue of up to 4.7 billion shares for no less than 8.80 yuan a share. Funds raised by the share issue will be used by Guangfa Bank to supplement its core tier-1 capital levels.

Existing shareholders will have the right to preferential subscription based on their current equity share. Following the share increase existing shareholders will hold no less than 80% of total equity, while new shareholders will hold a stake of no more than 20%.

As of the end of 2020 Guangfa Bank’s assets were 3.03 trillion yuan, growing 15.2% compared to the same period the year previously to breach the three trillion yuan threshold for the first time.

Operating revenues were 80.525 billion yuan, for a YoY rise of 5.52%, while net profits were 13.812 billion yuan, for a YoY increase of 9.79%.

In 2019 Guangfa Bank issued 45 billion yuan in perpetual bonds to supplement its capital levels. Guangfa Bank expects to soon be included as a systemically important bank in China, which will place stricter requirements upon its capital ratios.

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