April 29, 2014 / 3:16 AM / 4 years ago

UPDATE 1-Bank of Beijing plans Hong Kong share offer, could raise $4 bln

* Lender plans to issue as many as 3.4 bln H-shares

* Plans overallotment if demand good

* Smaller China banks seeking to boost capital in face of new rules (Add details, background)

By Lu Jianxin and Pete Sweeney

SHANGHAI, April 29 (Reuters) - China’s state-backed Bank of Beijing Co Ltd is planning a Hong Kong share offering that could raise more than $4 billion, the latest mainland bank seeking to boost its capital as new rules are phased in.

Chinese lenders are also under pressure to bolster capital bases as slower economic growth in the first quarter saw non-performing loan ratios rise at many Chinese banks.

The medium-sized lender, which counts Dutch bancassurer ING as its biggest shareholder, plans a base offering of up to 3.4 billion H-shares on the Hong Kong Stock Exchange’s main board, pending approval by shareholders and regulators, it said in a filing late on Monday.

Based on the bank’s Shanghai shares, the offering could raise around 26 billion yuan ($4.2 billion). Its shares in Shanghai were 0.9 percent weaker in early trade.

There is also an overallotment option if demand proves strong.

China Banking Regulatory Commissions began phasing in stricter capital adequacy requirements last year to get the domestic banking system in compliance with global rules on bank capital known as Basel III. Last year, Bank of Chongqing Co Ltd and Huishang Bank Corp Ltd raised funds through listing in Hong Kong.

Qiang Xin, Bank of Beijing’s chairman of its board of supervisors, was quoted by the official China Securities Journal as saying that the Hong Kong offering could raise its capital adequacy ratio by 3 percentage points and could satisfy the bank’s capital demand for 5 years.

The Bank of Beijing plans to convene a shareholders’ meeting on May 20 to discuss the plan, and it will complete the issue within a period granted by shareholders, which is typically one year in China.

Bank of Beijing listed in 2007 and conducted another fund-raising via a private placement in Shanghai, raising 11.8 billion yuan in 2012.

But mainland’s stock markets have been among the world’s worst performers in recent years, making it increasingly difficult for listed companies to tap the Shanghai and Shenzhen exchanges for funds.

Beijing has also encouraged firms to tap foreign capital markets to avoid diluting domestic indexes further.

The offer will be managed by Goldman Sachs Morgan Stanley, IFR, a Thomson Reuters publication, reported.

On Monday, Bank of Beijing reported a 15.3 percent rise in its 2013 net profit to 13.5 billion yuan ($2.16 billion), while its first quarter earnings climbed 9.5 percent to 4.5 billion yuan.

$1 = 6.2530 Chinese Yuan Editing by Stephen Coates and Edwina Gibbs

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