BoC: G20 rules won't require new equity issue

Bank of China (601988.SH, 3988.HKG) said that it will not issue new shares before the end of next year, despite the tougher capital requirements for select banks set by the G20 last week, the South China Morning Post reported. The G20 summit in Cannes identified 29 banks as being “global systemically important financial institutions” and mandated that they hold higher capital levels, requirements that come on top of the new Basel III regime that will be rolled out between 2013 and 2019. A BoC official said that the bank is prepared to meet the new standards: The new G20 rules require globally systemic banks to have capital adequacy ratios of at least 11.5-13%, and minimum core capital adequacy ratios of 8.5-9% by the end of 2019; BOC’s figures are 12.84% and 9.92%, respectively. Analysts say that BOC was labeled a systemically important bank because it has more overseas assets than other Chinese banks – about 20% of BoC’s profits came from overseas in the first half of this year, compared with just 5% for the Industrial and Commercial Bank of China (601398.SH, 1398.HKG)