Minsheng raises US$2.3b in share sale
(Shenzhen Daily)Updated: 2007-02-26 10:14
China Minsheng Banking Corp raised 18.2 billion yuan (US$2.3 billion)
by selling shares to a group of investors to help fund faster loan growth, two
people familiar with the sale said yesterday.
Minsheng sold 2 billion new shares at 9.08 yuan each, 31 percent below its closing price of 13.17 yuan February 16, said the two, who declined to be identified as the sale is still awaiting regulatory approval. China Life Insurance Co and Ping An Insurance (Group) Co were among buyers, the sources said.
Domestic banks are taking advantage of soaring stock prices to sell shares and extend a lending boom that helped fuel the nation's 10.7 percent economic growth last year. The sale will allow Minsheng, whose loans jumped fivefold between 2001 and 2005, to comply with stricter rules on banks' financial strength.
The sale shows the strong interest from investors and their confidence in the bank's long-term growth prospects, said Wang Yihuan, a Beijing-based analyst at China Asset Management Co, which owned 49.9 million shares in Minsheng as of June 30. Wang said China Asset Management failed to buy shares in the offering because of government regulations.
Minsheng's shares have gained 22 percent this year after more than tripling in 2006. The stock trades at 4.3 times estimated book value for 2007, compared with 3.5 times for rival Huaxia Bank Co.
Minsheng's capital adequacy ratio fell to 7.46 percent June 30 from 8.26 percent six months earlier. A bank that slips below the 8 percent regulatory minimum can be forced by the banking regulator to restrict lending.
(For more biz stories, please visit Industry Updates)
| ||