* Bank raises funds from majority shareholder Ping An
* Chinese lenders under pressure to boost capital strength
* Bad loans expected to rise as economy slows
SHANGHAI, Jan 8 China's Ping An Bank Co Ltd
has raised 14.73 billion yuan ($2.43 billion) by
selling stock to its main shareholder, becoming the latest
lender to raise funds to meet new banking standards and to
absorb an expected rise in bad loans.
Through the sale, Ping An Insurance Group
raised its stake in the bank to 59 percent from 52
percent, the two firms said in exchange filings late Tuesday.
The purchase price on Dec. 30 of 11.74 yuan per share valued
the bank at 1.12 times its book value on Sept. 30, the end of
its latest reporting quarter, according to Reuters calculations.
Chinese banks are under pressure to increase their financial
strength to meet tough conditions that the banking regulator
began implementing last year in line with new global standards
known as Basel III.
China's rules require mid-sized lenders like Ping An to
maintain tier-one capital ratios of at least 6.9 percent by the
end of 2014 compared with 6.5 percent last year.
Ping An Bank's ratio will rise to above 8.5 percent as a
result of the share issue, the bank said, from 7.43 percent at
Many banks have announced fundraising plans aimed at
boosting capital adequacy and strengthening their capacity to
absorb an expected rise in bad loans as the economy slows.
China Merchants Bank Co Ltd raised
more than $5 billion last year by selling stock to existing
shareholders in Shanghai and Hong Kong.
At least 12 other listed banks have announced plans to raise
about 425 billion yuan, largely through subordinate debt issues
that count as capital under China's new rules.
Regulators have also started allowing banks to sell
preferred shares, adding another fundraising option.
($1 = 6.0512 Chinese yuan)
(Reporting by Gabriel Wildau; Editing by Christopher Cushing)