The nation’s fourth-biggest lender by market value - Bank of China Ltd. - sold 32 billion yuan ($5.2 billion) of preferred securities to yield 6 percent, as Bloomberg reports.
The private placement happened today, two people knowing the matter said, asking not to be identified since the issue hasn’t been made public.
In September Bank of China said it won regulatory approval to sell as much as 600 million preferred shares, with the first batch of 320 million to be completed within six months, according to a statement posted to the Shanghai Stock Exchange.
The issuance will help Beijing-based Bank of China shore up its capital buffers after Chinese lenders’ bad loans jumped by the most since 2005 in the third quarter. Bank of China raised $6.5 billion last month selling additional Tier 1 securities in Asia’s largest ever note offering denominated in U.S. dollars. Officials at Bank of China’s press department didn’t immediately respond to a telephone call seeking comment on the latest sale.
In a statement of Nov 15 the China Banking Regulatory Commission said that nonperforming loans rose by 72.5 billion yuan from the previous quarter to 766.9 billion yuan as of Sept. 30. The central bank has provided cash to individual lenders to support growth, while avoiding any across-the-board cut in interest rates or reserve requirements.
Net income of Bank of China increased 4.9 percent to 41.4 billion yuan from 39.5 billion yuan a year earlier for the three months through September, according to an Oct. 30 Hong Kong exchange filing.
