China to buy 520 bln yuan A shares of state banks

Major Chinese state banks announced plans to raise up to 520 billion yuan (HK$556.9 billion) in total via A share placements targeting the Ministry of Finance and other state-owned entities to boost their core capital.

Bank of China (3988) signed an agreement on Sunday with the MOF that the authority will subscribe 10.98 billion new shares to be issued in Shanghai at 6.05 yuan per share, involving 165 billion yuan, according to a stock exchange filing.

China Construction Bank (0939) will place new shares to MOF at 9.27 yuan apiece for no more than 105 billion yuan. The net proceeds will be fully used to replenish the bank's core tier 1 capital after deduction of relevant issuance costs, the bank said in a statement.

Bank of Communications (3328) will pool up to 120 billion yuan, including 112.4 billion yuan from MOF and 7.58 billion yuan from China National Tobacco Corporation and its investment arm China Shuangwei Investment.

Postal Savings Bank of China (1658) will raise 130 billion yuan from MOF, China Mobile (0941) and China State Shipbuilding Corporation.

THEMIS QI