ICBC seeks to raise £2.5bn new cash in a bid to bolster its balance sheet

INDUSTRIAL & Commercial Bank of China (ICBC), the world’s biggest bank by market capitalisation, unexpectedly unveiled plans yesterday to raise £2.5bn in new capital to bolster its balance sheet.

The plan was announced just after ICBC reported a 58 per cent rise in fourth-quarter profit, broadly meeting expectations.

ICBC will sell up to 25bn yuan in bonds convertible into Shanghai-traded A shares, and left open the option of selling additional Hong Kong-listed H shares, to replenish capital and support growth over the next three years.

ICBC aims to maintain its capital adequacy ratio, a key measure of banks’ ability to absorb potential losses, above 12 per cent after the fundraising, and will not need to raise further capital for another three years.

The lender, with a network of more than 16,000 outlets across China, earned 28.6bn yuan in the quarter through December, compared with 18.11bn yuan a year earlier. The average expected was 29.9bn yuan.