HONG KONG/SHANGHAI: China Minsheng Banking Corp is raising about HK$11.2 billion ($1.44 billion) to boost capital and improve its balance sheet after pricing a Hong Kong share offer near the middle of an indicative range, a source with direct knowledge of the deal said on Monday.
Mid-sized Minsheng's widely flagged capital raising is a sign of more things to come as Chinese banks and insurers bolster their balance sheets after years of rapid growth.
It is the second bank to tap shareholders this month, after Bank of Communications, China's fifth-largest by assets, raised about $8.9 billion through a private placement.
China is set to see a flurry of fundraising this year, with the state-run China Securities Journal estimating publicly traded banks will raise some 100 billion yuan ($16 billion) in share offerings through 2012.
The bank sold 1.65 billion new Hong Kong-listed shares at HK$6.79 each, said the source, who was not authorised to speak publicly on the matter.
The offering was priced at a discount of 5 percent to Friday's close of HK$7.15, near the middle of an indicative range of HK$6.65-6.86 per share.
"Next up is probably China Merchants Bank," said Alex Lee, an analyst at DBS-Vickers in Hong Kong. "The wider environment has been difficult for fundraising, and we are likely to see some banks hesitate because of the weak markets."
China Minsheng halted shares ahead of the fundraising, which comes days after it reported a 58.8 percent surge in 2011 net profit.
China Merchants Bank Co Ltd , the country's sixth-largest lender by market value, has received regulatory approval to issue up to 20 billion yuan ($3.17 billion) of bonds.
China Minsheng said last month it had received approval from the securities regulator for its share sale.
The fundraising follows moves by Beijing to improve the safety of the banking system by raising capital adequacy ratio requirements.
China Minsheng shares will resume trading on Tuesday, the firm said in a filing to the Shanghai stock exchange.
Haitong International and UBS AG were joint global co-ordinators of the offering.
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