Industrial Bank's RMB 18-bln rights issue plan approved

Nov. 23, 2009 (China Knowledge) - China's Industrial Bank Co Ltd<601166>, a Fujian-based bank partly owned by HSBC Holdings Plc<0005><HBC>, announced today that its board of directors have approved a rights issue plan to raise up to RMB 18 billion to boost its capital base.

The bank said in a statement filed with the Shanghai Stock Exchange that it plans to issue up to 2.5 new shares for each 10 existing shares.

The issue price will be decided based on the lender's latest audited net asset value per share, its share price on the secondary market and its price-to-earning ratio, according to the statement.

Proceeds from the rights offering will be used to replenish the bank's capital and boost its capital adequacy ratio and core capital adequacy ratio to 12%, and 8%, respectively.

At the end of September, the bank's capital adequacy ratio was 10.63% and core capital adequacy ratio was 7.5%, down from 11.73% and 8.83% at the end of 2007, the year when the bank launched an initial public offering.

The bank will hold a shareholder meeting to discuss the plan on Dec. 8.

In the first three quarters of this year, Industrial Bank booked a net profit of RMB 9.57 billion, up 4.83% from a year earlier. Basic earnings per share were RMB 1.91, as reported by China Knowledge earlier.