One of China’s big state-owned banks has grabbed approval from regulators for a private replacement to shore up its capital adequacy levels.
On 6 December Postal Savings Bank of China (PSBC) announced that it had garnered approval from the China Banking and Insurance Regulatory Commission (CBIRC) for a private placement of A-shares to raise up to 45 billion yuan.
PSBC first revealed plans to improve its capital adequacy via a private placement of shares in its third quarter report. On 26 October a meeting of the PSBC board approved a resolution to issue up to 6.777 billion shares via a private placement to raise up to 45 billion yuan.
At the time, PSBC said that funds raised by the issue would be fully used to supplement its tier-1 capital levels, and that this would “have major significance for maintaining the steady development of the bank’s future operations, raising profit levels and risk resistance capability, and better supporting the development of the real economy.”
As of the end of September, PSBC’s core tier-1 capital adequacy ratio was 9.55%, while its tier-1 capital adequacy ratio was 11.53%, and its capital adequacy ratio was 14.10%.
For the first three quarters of 2022 PSBC’s operating revenues were 256.931 billion yuan, for year-on-year growth of 7.79%, while net profits attributable to shareholders were 73.849 billion yuan, for YoY growth of 14.48%.
PSBC’s non-performing loan ratio stood at 0.83% as of the end of September, while its provisions coverage ratio was 404.47%.