Citic Bank to Raise Up to $2 Billion in Share Placement

China Citic Bank Corp., a unit of the nation’s largest state-owned investment firm, plans to raise as much as 11.9 billion yuan ($2 billion) in a private sale of domestic shares to replenish Tier-1 capital.

The Beijing-based bank will sell as many as 2.46 billion of Shanghai-listed A shares at 4.84 yuan each, subject to adjustment, according to a filing to the Hong Kong stock exchange yesterday.

Citic Bank is bolstering its capital after China introduced stricter requirements in January 2013, adding to challenges for a banking industry facing slower profit growth and rising bad debts. Shares of Chinese lenders are trading close to record-low valuations, making it harder for them to raise funds through public offerings.

The bank’s third-quarter net income was 10.2 billion yuan, according to a separate statement to the Shanghai Stock Exchange based on China accounting standards. That was less than the 11 billion yuan median estimate from nine analysts surveyed by Bloomberg News. Its core Tier-1 capital adequacy ratio was 9.29 percent at the end of September.

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