trending Market Intelligence /marketintelligence/en/news-insights/trending/0qctc5dxtwonz3pslrhsoa2 content esgSubNav
In This List

Moody's: Agricultural Bank of China's planned share sale is credit positive

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Moody's: Agricultural Bank of China's planned share sale is credit positive

Agricultural Bank of China Ltd.'s plan to raise 100 billion yuan through a private share placement is credit positive as it will significantly improve the bank's capitalization, Moody's said.

The proposed share sale is subject to shareholder and regulatory approvals and will add about 8% of additional equity capital to the bank, the rating agency said March 12.

The agency expects the share sale to improve the bank's tangible common equity/risk-weighted asset ratio by 80 basis points to around 11.06% from 10.26% as of June 2017. The bank's common equity Tier 1 ratio will also climb to 11.38% from 10.58% as of September 2017.

Moody's calculates that Agricultural Bank of China can sell up to 8.5% of the new shares to seven government-related investors. The bank's leading shareholders, Central Huijin and the Ministry of Finance, will also subscribe to shares to maintain their current proportion of shareholding in the bank.

The capital increase will also strengthen the bank's ability to maintain its asset growth while meeting regulatory requirements, the agency added.

As of March 12, US$1 was equivalent to 6.33 Chinese yuan.