(Adds Agricultural Bank of China in paragraphs 1, 2, 8)
SINGAPORE/HONG KONG Aug 14 Agricultural Bank of
China (AgBank) and Bank of China the country's third- and
fourth-biggest lenders, have obtained regulatory approval to
issue up to $29 billion worth of preference shares to help shore
up their capital.
The China Banking Regulatory Commission has given the green
light for AgBank to issue preferred shares
for up to 80 billion yuan ($13 billion), the bank said in a
filing to the Shanghai stock exchange.
Bank of China also had approval to
issue preferred shares of up to 60 billion yuan ($9.75 billion)
in the domestic market and up to $6.5 billion overseas, the bank
said in a separate filing.
As economic growth eases and bad debt build, China's banks
are rushing to strengthen their balance sheets to meet new
global capital rules known as Basel III.
The Chinese government has been rigorously enforcing these
regulations in efforts to ward off a financial crisis following
a huge run-up in debt since 2008 and a marked slowdown in the
Other top Chinese lenders such as Industrial and Commercial
Bank of China Ltd (ICBC) also plan to
issue preferred shares worth billions of dollars.
The announcements came after markets in China and Hong Kong
In Shanghai, AgBank and Bank of China's shares had closed
0.4 percent lower, compared with a fall of 0.7 percent in the
Shanghai composite index.
In Hong Kong, AgBank's shares ended 1.1 percent down, while
Bank of China's stock fell 0.5 percent, lagging the Hang Seng
Index's 0.4 percent fall.
(1 US dollar = 6.1520 Chinese yuan)
(Reporting by Lee Chyen Yee in SINGAPORE and Meg Shen in HONG
KONG; editing by Jane Baird and David Evans)