China’s third largest bank Agricultural Bank of China (ABC) said on Monday that it hopes to raise up to RMB 100 billion ($15.8 billion) in a private placement of its Shanghai-listed shares, Caixin Global reports.
The funds raised will go towards increasing ABC’s core tier 1 capital adequacy ratio – a central measure of a bank’s strength in the occasion of asset losses – from 10.38% to 11.23%, above the industry average of 10.72%, the bank said in a press filing.
Chinese banks are under increasing pressure to up improve their capital ratios following closer scrutiny by the standard assets so as to curb leverage and limit shadow banking.