Oct. 19 (Bloomberg) -- Bank of China Ltd., the nation’s fourth-largest lender by assets, plans to sell 23 billion yuan ($3.7 billion) of subordinated bonds to replenish capital, two people familiar with the matter said.
The sale is pending regulatory approval and timing has yet to be determined, the people said, asking not to be identified because the information is private. BOC International Holdings Ltd., the Beijing-based company’s investment banking unit, was hired to manage the sale.
Bank of China joins rivals including Agricultural Bank of China Ltd. in boosting capital with bonds as shares of Chinese lenders trade near record low valuations on concern that an economic slowdown will erode profits. The China Banking Regulatory Commission is requiring systemically important banks to hold a minimum capital ratio of 11.5 percent and a core ratio of 9.5 percent under rules to be phased in next year.
The bank was the only Chinese lender to be included on a provisional list of 29 systemically important financial institutions published by the Financial Stability Board.
With 12.8 trillion yuan of assets, Bank of China had a capital adequacy ratio of 13 percent as of June 30 and a core Tier-1 capital ratio of 10.15 percent, both exceeding requirements, according to company data.