(Adds Agricultural Bank of China in paragraphs 1, 2, 8)
SINGAPORE/HONG KONG, Aug 14 (Reuters) - 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 economy.
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 had closed.
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