Bank of Beijing Seeks Up to 13 Billion Yuan in Placement

Updated on
  • Move comes after CSRC approved share sale last month
  • City commercial banks are seeking to boost their capital

Bank of Beijing Co. is seeking to raise as much as 13 billion yuan ($2 billion) in a private placement, its second move to boost capital in two months.

The bank plans to sell as much as 130 million preferred shares and will use the funds to replenish Tier-1 capital and raise its capital adequacy ratio level, it said in a statement to the Shanghai Stock Exchange. The lender’s private placement comes after its proposed sale of 4.9 billion yuan in preferred shares, announced in October, was approved by the China Securities Regulatory Commission last month.

Like other smaller Chinese banks, Bank of Beijing has been grappling with shrinking profit growth. The bank’s first-half net income growth almost halved to 13 percent in 2015 from three years earlier. 

Faced with rising corporate defaults, China’s city commercial banks are seeking to replenish capital to expand out of their home bases and compete with larger, better-funded rivals. Bank of Jinzhou Co. and Bank of Qingdao Co. completed initial public offerings worth a combined $1.4 billion in the past month, according to data compiled by Bloomberg.

— With assistance by Jonathan Browning, and Li Liu

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