UPDATE 1-China’s CITIC Bank says may issue new shares

* CITIC considering fundraising, but no plan yet

* Aims to have branches in Singapore, Australia, Taiwan

* Shares down more than 25 percent so far this year
(Adds details, quotes)

HONG KONG, May 10 (BestGrowthStock) – China’s CITIC Bank (0998.HK: )
(601998.SS: ) is considering an issue of new shares to raise
capital, its chairman said on Monday, as Chinese lenders look to
bolster their balance sheets following a lending binge last year.

Bigger rivals such as Industrial and Commercial Bank of China
(ICBC) (1398.HK: ) (601398.SS: ) and Bank of China (3988.HK: )
(601988.SS: ) have already announced plans to raise up to $15.4
billion in new cash, as they rush to replenish capital amid moves
by the authorities to tighten lending.

“Issuing new shares is one important way we can raise
capital,” Bank Chairman Kong Dan told reporters. “We will
seriously look at selling new shares to raise capital because we
can see that the regulatory requirements are getting higher.”

In March, CITIC Bank said it expected to issue up to 25
billion yuan ($3.7 billion) worth of subordinated and hybrid
bonds in the first half of the year to replenish its capital.

“Currently, we have no plans to issue new shares and we’re
still using bonds to raise funds,” Kong said.

Chinese banks could collectively request $60 billion or more
from investors in Hong Kong and Shanghai, seriously testing
appetites for providing new funding to a group that doled out a
record $1.4 trillion in new loans last year. [ID:nTOE63T00H]

Citic Bank’s largest shareholder is unlisted Citic Group,
which is also headed by Kong. Besides the bank, it owns a stake
in Citic Securities (600030.SS: ), China’s largest listed


For a graphic on recent fundraising plans by Chinese banks:



The bank is also applying for a banking licence in Singapore
as part of a broader plan to become a financial conglomerate, and
has set its eyes on Australia and Taiwan for further expansion.

China and Taiwan signed a financial services pact in November
last year, paving the way for banks on both sides to invest in
each other and operate on both sides of the Taiwan strait.

“We haven’t decided if we should open a branch or a
representative office in Taiwan, but we will have a decision by
the end of this year,” said Kong.

Citic Bank’s Hong Kong-listed shares have lost over a quarter
of their value so far this year, lagging a 6 percent decline on
the benchmark Hang Seng Index (.HSI: )

Investment Analysis

(Reporting by Kelvin Soh, writing by Doug Young; Editing by
Chris Lewis)

UPDATE 1-China’s CITIC Bank says may issue new shares