Industrial and Commercial Bank of China (ICBC; 601398.SH, 1398.HK) plans to raise up to US$6.6 billion through a rights offering aimed at replenishing its capital base, Bloomberg reported, citing a statement made to the Shanghai stock exchange. ICBC, the world’s largest bank by market value, will hold a shareholder meeting in Beijing on September 15 to approve the scheme. ICBC also announced that it would privatize ICBC Asia (0349.HK), a Hong Kong unit of the bank. The push to shore up ICBC’s balance sheets comes after bank lending soared to US$1.4 trillion in 2009, more than twice the 2008 figure. Recent reports by Fitch Ratings and data from the China Bank Regulatory Commission (CBRC) suggest that China’s banking sector may have been significantly weakened by the government-directed credit binge. Some 23% of all loans to local government finance vehicles could face repayment difficulties.
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