Agricultural Bank of China to Issue 50B Yuan in Perpetual Bonds

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One of China’s big state-owned banks has announced a new issue of perpetual bonds to bulk up its capital levels.

Agricultural Bank of China (ABC) announced on 15 January that it planned to issue its first round of perpetual bonds on 18 February to raise 50 billion yuan in funds.

ABC obtained approval from Chinese regulators in August 2021 for a perpetual bond issuance quota of 120 billion yuan.

The state-owned lender issued 40 billion yuan in perpetual bonds on 16 November, leaving another 30 billion left following the issue scheduled for February.

As of September 2021 ABC’s capital adequacy ratio stood at 16.70%, as compared to 15.12% at the end of 2018. Over the same period its tier-1 capital adequacy ratio increased to 12.98% from 12.13%.

ABC said that the new issue would enable it to increase its capital adequacy ratio to 16.98%, and its tier-1 capital adequacy ratio to 13.26%.