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Bank of Jinzhou to suspend dividends on preference shares

China-based Bank of Jinzhou Co. Ltd.'s board proposed to cancel dividend payments on the bank's offshore preference shares for the year through Oct. 26 after its capital adequacy ratios as of Dec. 31, 2018, failed to meet regulatory requirements.

The plan to halt payments came after the troubled lender reported a net loss of 4.54 billion yuan for the year ended Dec. 31, 2018. Its capital adequacy ratio and Tier 1 capital adequacy ratio stood at 9.12% and 7.43% as of the end of 2018, down from 11.67% and 10.24%, respectively, as of 2017-end. The respective ratios dropped further to 7.47% and 6.41% at June 30.

The bank attributed the loss to higher provisions for impairments, a greater balance of nonperforming assets and the adoption of the IFRS 9 accounting standard.

The cancellation of payments is subject to the approval of the bank's shareholders, the bank said in an Aug. 30 filing.

In addition, the board proposed to amend the rules for equity management, further details on which will be disclosed in due course. The plan is subject to the shareholder approval.

As of Aug. 30, US$1 was equivalent to 7.15 Chinese yuan.