China bank to offer convertible securities
Jianguo Jiang and Cathy Chan Bloomberg News Wednesday, November 12, 2003
Shanghai Pudong Development Bank, China's second-biggest publicly traded lender, said Wednesday that it would sell 6 billion yuan, or $724.8 million, of bonds convertible into shares to finance increased lending as economic growth accelerates.
.
The bank's stock fell 4.5 percent Wednesday to 8.77 yuan. Traders said investors were concerned that the sale will dilute earnings per share. The Shanghai-based lender, in which Citigroup owns a 5 percent stake, needs funds to help maintain its capital above the minimum required by regulators.
.
A similar funding plan by China Merchants Bank, the mainland's biggest publicly traded lender, drew criticism from some shareholders because of the potential profit dilution. Pudong Bank sold 300 million new shares in January, triggering the biggest decline in its stock in 16 months.
.
"Almost every bank in China needs funds to support growth," said Chen Min, a director at Shenyin Wanguo Securities. "Public shareholders are concerned whether their interests will be protected and whether the size of the offer may be too big."
.
Pudong Bank had sufficient capital as of Sept. 30 to cover 8.46 percent of its risk-adjusted assets. Central banks recommend a minimum ratio of 8 percent.
.
Four-fifths of the convertible bond proceeds are earmarked for company loans and the rest for securities investment, the bank said. The five-year bonds will pay annual interest of 1.1 percent to 2.5 percent.
.
Loan demand is increasing in China to help sustain an economy that grew 9.1 percent in the third quarter from a year earlier.
.
Pudong Bank's third-quarter profit rose 36 percent to 425.2 million yuan after it increased lending to households and businesses. Bad loans at the bank fell to 2.25 percent of its total at the end of September from 3.38 percent at the end of December.
.
"Pudong Bank is betting it can make money from corporate lending as China's economy surges," said Lu Weiqiang, an analyst at China Merchants Securities in Shenzhen. "It's performed better than other banks in handling the risk of bad loans."
.
Pudong Bank's bond will pay interest of 1.1 percent in the first year, compared with 1 percent proposed by China Merchant. Pudong Bank said its shareholders would vote on the sale plan on Dec. 12. Bond pricing in China is guided by deposit rates. The standard five-year deposit rate is 2.79 percent.
.
Bloomberg News
Shanghai Pudong Development Bank, China's second-biggest publicly traded lender, said Wednesday that it would sell 6 billion yuan, or $724.8 million, of bonds convertible into shares to finance increased lending as economic growth accelerates.
.
The bank's stock fell 4.5 percent Wednesday to 8.77 yuan. Traders said investors were concerned that the sale will dilute earnings per share. The Shanghai-based lender, in which Citigroup owns a 5 percent stake, needs funds to help maintain its capital above the minimum required by regulators.
.
A similar funding plan by China Merchants Bank, the mainland's biggest publicly traded lender, drew criticism from some shareholders because of the potential profit dilution. Pudong Bank sold 300 million new shares in January, triggering the biggest decline in its stock in 16 months.
.
"Almost every bank in China needs funds to support growth," said Chen Min, a director at Shenyin Wanguo Securities. "Public shareholders are concerned whether their interests will be protected and whether the size of the offer may be too big."
.
Pudong Bank had sufficient capital as of Sept. 30 to cover 8.46 percent of its risk-adjusted assets. Central banks recommend a minimum ratio of 8 percent.
.
Four-fifths of the convertible bond proceeds are earmarked for company loans and the rest for securities investment, the bank said. The five-year bonds will pay annual interest of 1.1 percent to 2.5 percent.
.
Loan demand is increasing in China to help sustain an economy that grew 9.1 percent in the third quarter from a year earlier.
.
Pudong Bank's third-quarter profit rose 36 percent to 425.2 million yuan after it increased lending to households and businesses. Bad loans at the bank fell to 2.25 percent of its total at the end of September from 3.38 percent at the end of December.
.
"Pudong Bank is betting it can make money from corporate lending as China's economy surges," said Lu Weiqiang, an analyst at China Merchants Securities in Shenzhen. "It's performed better than other banks in handling the risk of bad loans."
.
Pudong Bank's bond will pay interest of 1.1 percent in the first year, compared with 1 percent proposed by China Merchant. Pudong Bank said its shareholders would vote on the sale plan on Dec. 12. Bond pricing in China is guided by deposit rates. The standard five-year deposit rate is 2.79 percent.
.
Bloomberg News Shanghai Pudong Development Bank, China's second-biggest publicly traded lender, said Wednesday that it would sell 6 billion yuan, or $724.8 million, of bonds convertible into shares to finance increased lending as economic growth accelerates.
.
The bank's stock fell 4.5 percent Wednesday to 8.77 yuan. Traders said investors were concerned that the sale will dilute earnings per share. The Shanghai-based lender, in which Citigroup owns a 5 percent stake, needs funds to help maintain its capital above the minimum required by regulators.
.
A similar funding plan by China Merchants Bank, the mainland's biggest publicly traded lender, drew criticism from some shareholders because of the potential profit dilution. Pudong Bank sold 300 million new shares in January, triggering the biggest decline in its stock in 16 months.
.
"Almost every bank in China needs funds to support growth," said Chen Min, a director at Shenyin Wanguo Securities. "Public shareholders are concerned whether their interests will be protected and whether the size of the offer may be too big."
.
Pudong Bank had sufficient capital as of Sept. 30 to cover 8.46 percent of its risk-adjusted assets. Central banks recommend a minimum ratio of 8 percent.
.
Four-fifths of the convertible bond proceeds are earmarked for company loans and the rest for securities investment, the bank said. The five-year bonds will pay annual interest of 1.1 percent to 2.5 percent.
.
Loan demand is increasing in China to help sustain an economy that grew 9.1 percent in the third quarter from a year earlier.
.
Pudong Bank's third-quarter profit rose 36 percent to 425.2 million yuan after it increased lending to households and businesses. Bad loans at the bank fell to 2.25 percent of its total at the end of September from 3.38 percent at the end of December.
.
"Pudong Bank is betting it can make money from corporate lending as China's economy surges," said Lu Weiqiang, an analyst at China Merchants Securities in Shenzhen. "It's performed better than other banks in handling the risk of bad loans."
.
Pudong Bank's bond will pay interest of 1.1 percent in the first year, compared with 1 percent proposed by China Merchant. Pudong Bank said its shareholders would vote on the sale plan on Dec. 12. Bond pricing in China is guided by deposit rates. The standard five-year deposit rate is 2.79 percent.
.
Bloomberg News Shanghai Pudong Development Bank, China's second-biggest publicly traded lender, said Wednesday that it would sell 6 billion yuan, or $724.8 million, of bonds convertible into shares to finance increased lending as economic growth accelerates.
.
The bank's stock fell 4.5 percent Wednesday to 8.77 yuan. Traders said investors were concerned that the sale will dilute earnings per share. The Shanghai-based lender, in which Citigroup owns a 5 percent stake, needs funds to help maintain its capital above the minimum required by regulators.
.
A similar funding plan by China Merchants Bank, the mainland's biggest publicly traded lender, drew criticism from some shareholders because of the potential profit dilution. Pudong Bank sold 300 million new shares in January, triggering the biggest decline in its stock in 16 months.
.
"Almost every bank in China needs funds to support growth," said Chen Min, a director at Shenyin Wanguo Securities. "Public shareholders are concerned
Shanghai Pudong Development Bank, China's second-biggest publicly traded lender, said Wednesday that it would sell 6 billion yuan, or $724.8 million, of bonds convertible into shares to finance increased lending as economic growth accelerates.
.
The bank's stock fell 4.5 percent Wednesday to 8.77 yuan. Traders said investors were concerned that the sale will dilute earnings per share. The Shanghai-based lender, in which Citigroup owns a 5 percent stake, needs funds to help maintain its capital above the minimum required by regulators.
.
A similar funding plan by China Merchants Bank, the mainland's biggest publicly traded lender, drew criticism from some shareholders because of the potential profit dilution. Pudong Bank sold 300 million new shares in January, triggering the biggest decline in its stock in 16 months.
.
"Almost every bank in China needs funds to support growth," said Chen Min, a director at Shenyin Wanguo Securities. "Public shareholders are concerned whether their interests will be protected and whether the size of the offer may be too big."
.
Pudong Bank had sufficient capital as of Sept. 30 to cover 8.46 percent of its risk-adjusted assets. Central banks recommend a minimum ratio of 8 percent.
.
Four-fifths of the convertible bond proceeds are earmarked for company loans and the rest for securities investment, the bank said. The five-year bonds will pay annual interest of 1.1 percent to 2.5 percent.
.
Loan demand is increasing in China to help sustain an economy that grew 9.1 percent in the third quarter from a year earlier.
.
Pudong Bank's third-quarter profit rose 36 percent to 425.2 million yuan after it increased lending to households and businesses. Bad loans at the bank fell to 2.25 percent of its total at the end of September from 3.38 percent at the end of December.
.
"Pudong Bank is betting it can make money from corporate lending as China's economy surges," said Lu Weiqiang, an analyst at China Merchants Securities in Shenzhen. "It's performed better than other banks in handling the risk of bad loans."
.
Pudong Bank's bond will pay interest of 1.1 percent in the first year, compared with 1 percent proposed by China Merchant. Pudong Bank said its shareholders would vote on the sale plan on Dec. 12. Bond pricing in China is guided by deposit rates. The standard five-year deposit rate is 2.79 percent.
.
Bloomberg News Shanghai Pudong Development Bank, China's second-biggest publicly traded lender, said Wednesday that it would sell 6 billion yuan, or $724.8 million, of bonds convertible into shares to finance increased lending as economic growth accelerates.
.
The bank's stock fell 4.5 percent Wednesday to 8.77 yuan. Traders said investors were concerned that the sale will dilute earnings per share. The Shanghai-based lender, in which Citigroup owns a 5 percent stake, needs funds to help maintain its capital above the minimum required by regulators.
.
A similar funding plan by China Merchants Bank, the mainland's biggest publicly traded lender, drew criticism from some shareholders because of the potential profit dilution. Pudong Bank sold 300 million new shares in January, triggering the biggest decline in its stock in 16 months.
.
"Almost every bank in China needs funds to support growth," said Chen Min, a director at Shenyin Wanguo Securities. "Public shareholders are concerned whether their interests will be protected and whether the size of the offer may be too big."
.
Pudong Bank had sufficient capital as of Sept. 30 to cover 8.46 percent of its risk-adjusted assets. Central banks recommend a minimum ratio of 8 percent.
.
Four-fifths of the convertible bond proceeds are earmarked for company loans and the rest for securities investment, the bank said. The five-year bonds will pay annual interest of 1.1 percent to 2.5 percent.
.
Loan demand is increasing in China to help sustain an economy that grew 9.1 percent in the third quarter from a year earlier.
.
Pudong Bank's third-quarter profit rose 36 percent to 425.2 million yuan after it increased lending to households and businesses. Bad loans at the bank fell to 2.25 percent of its total at the end of September from 3.38 percent at the end of December.
.
"Pudong Bank is betting it can make money from corporate lending as China's economy surges," said Lu Weiqiang, an analyst at China Merchants Securities in Shenzhen. "It's performed better than other banks in handling the risk of bad loans."
.
Pudong Bank's bond will pay interest of 1.1 percent in the first year, compared with 1 percent proposed by China Merchant. Pudong Bank said its shareholders would vote on the sale plan on Dec. 12. Bond pricing in China is guided by deposit rates. The standard five-year deposit rate is 2.79 percent.
.
Bloomberg News Shanghai Pudong Development Bank, China's second-biggest publicly traded lender, said Wednesday that it would sell 6 billion yuan, or $724.8 million, of bonds convertible into shares to finance increased lending as economic growth accelerates.
.
The bank's stock fell 4.5 percent Wednesday to 8.77 yuan. Traders said investors were concerned that the sale will dilute earnings per share. The Shanghai-based lender, in which Citigroup owns a 5 percent stake, needs funds to help maintain its capital above the minimum required by regulators.
.
A similar funding plan by China Merchants Bank, the mainland's biggest publicly traded lender, drew criticism from some shareholders because of the potential profit dilution. Pudong Bank sold 300 million new shares in January, triggering the biggest decline in its stock in 16 months.
.
"Almost every bank in China needs funds to support growth," said Chen Min, a director at Shenyin Wanguo Securities. "Public shareholders are concerned whether their interests will be protected and whether the size of the offer may be too big."
.
Pudong Bank had sufficient capital as of Sept. 30 to cover 8.46 percent of its risk-adjusted assets. Central banks recommend a minimum ratio of 8 percent.
.
Four-fifths of the convertible bond proceeds are earmarked for company loans and the rest for securities investment, the bank said. The five-year bonds will pay annual interest of 1.1 percent to 2.5 percent.
.
Loan demand is increasing in China to help sustain an economy that grew 9.1 percent in the third quarter from a year earlier.
.
Pudong Bank's third-quarter profit rose 36 percent to 425.2 million yuan after it increased lending to households and businesses. Bad loans at the bank fell to 2.25 percent of its total at the end of September from 3.38 percent at the end of December.
.
"Pudong Bank is betting it can make money from corporate lending as China's economy surges," said Lu Weiqiang, an analyst at China Merchants Securities in Shenzhen. "It's performed better than other banks in handling the risk of bad loans."
.
Pudong Bank's bond will pay interest of 1.1 percent in the first year, compared with 1 percent proposed by China Merchant. Pudong Bank said its shareholders would vote on the sale plan on Dec. 12. Bond pricing in China is guided by deposit rates. The standard five-year deposit rate is 2.79 percent.
.
Bloomberg News
< < Back to Start of Article Shanghai Pudong Development Bank, China's second-biggest publicly traded lender, said Wednesday that it would sell 6 billion yuan, or $724.8 million, of bonds convertible into shares to finance increased lending as economic growth accelerates.
.
The bank's stock fell 4.5 percent Wednesday to 8.77 yuan. Traders said investors were concerned that the sale will dilute earnings per share. The Shanghai-based lender, in which Citigroup owns a 5 percent stake, needs funds to help maintain its capital above the minimum required by regulators.
.
A similar funding plan by China Merchants Bank, the mainland's biggest publicly traded lender, drew criticism from some shareholders because of the potential profit dilution. Pudong Bank sold 300 million new shares in January, triggering the biggest decline in its stock in 16 months.
.
"Almost every bank in China needs funds to support growth," said Chen Min, a director at Shenyin Wanguo Securities. "Public shareholders are concerned whether their interests will be protected and whether the size of the offer may be too big."
.
Pudong Bank had sufficient capital as of Sept. 30 to cover 8.46 percent of its risk-adjusted assets. Central banks recommend a minimum ratio of 8 percent.
.
Four-fifths of the convertible bond proceeds are earmarked for company loans and the rest for securities investment, the bank said. The five-year bonds will pay annual interest of 1.1 percent to 2.5 percent.
.
Loan demand is increasing in China to help sustain an economy that grew 9.1 percent in the third quarter from a year earlier.
.
Pudong Bank's third-quarter profit rose 36 percent to 425.2 million yuan after it increased lending to households and businesses. Bad loans at the bank fell to 2.25 percent of its total at the end of September from 3.38 percent at the end of December.
.
"Pudong Bank is betting it can make money from corporate lending as China's economy surges," said Lu Weiqiang, an analyst at China Merchants Securities in Shenzhen. "It's performed better than other banks in handling the risk of bad loans."
.
Pudong Bank's bond will pay interest of 1.1 percent in the first year, compared with 1 percent proposed by China Merchant. Pudong Bank said its shareholders would vote on the sale plan on Dec. 12. Bond pricing in China is guided by deposit rates. The standard five-year deposit rate is 2.79 percent.
.
Bloomberg News Shanghai Pudong Development Bank, China's second-biggest publicly traded lender, said Wednesday that it would sell 6 billion yuan, or $724.8 million, of bonds convertible into shares to finance increased lending as economic growth accelerates.
.
The bank's stock fell 4.5 percent Wednesday to 8.77 yuan. Traders said investors were concerned that the sale will dilute earnings per share. The Shanghai-based lender, in which Citigroup owns a 5 percent stake, needs funds to help maintain its capital above the minimum required by regulators.
.
A similar funding plan by China Merchants Bank, the mainland's biggest publicly traded lender, drew criticism from some shareholders because of the potential profit dilution. Pudong Bank sold 300 million new shares in January, triggering the biggest decline in its stock in 16 months.
.
"Almost every bank in China needs funds to support growth," said Chen Min, a director at Shenyin Wanguo Securities. "Public shareholders are concerned whether their interests will be protected and whether the size of the offer may be too big."
.
Pudong Bank had sufficient capital as of Sept. 30 to cover 8.46 percent of its risk-adjusted assets. Central banks recommend a minimum ratio of 8 percent.
.
Four-fifths of the convertible bond proceeds are earmarked for company loans and the rest for securities investment, the bank said. The five-year bonds will pay annual interest of 1.1 percent to 2.5 percent.
.
Loan demand is increasing in China to help sustain an economy that grew 9.1 percent in the third quarter from a year earlier.
.
Pudong Bank's third-quarter profit rose 36 percent to 425.2 million yuan after it increased lending to households and businesses. Bad loans at the bank fell to 2.25 percent of its total at the end of September from 3.38 percent at the end of December.
.
"Pudong Bank is betting it can make money from corporate lending as China's economy surges," said Lu Weiqiang, an analyst at China Merchants Securities in Shenzhen. "It's performed better than other banks in handling the risk of bad loans."
.
Pudong Bank's bond will pay interest of 1.1 percent in the first year, compared with 1 percent proposed by China Merchant. Pudong Bank said its shareholders would vote on the sale plan on Dec. 12. Bond pricing in China is guided by deposit rates. The standard five-year deposit rate is 2.79 percent.
.
Bloomberg News
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