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Perhaps inspired by the rebound in global financial shares in the preceding days, Industrial and Commercial Bank of China unveiled the details of its long-planned rights issue on July 28th. The firm, the largest lender by market value in China and the world, said it would raise Rmb45bn (US$6.6bn) by selling new shares to existing investors, including its controlling shareholders in the Chinese government.
The plan comes at a crucial time for Chinese banks, which generally need to raise fresh capital after a lending binge in 2009 and into early 2010. The group effort enjoyed a good start when Agricultural Bank of China made a surprisingly strong initial public offering in early July that may eventually raise up to US$22.1bn. But the fundraising queue continues to grow and doubts persist about whether private investors can absorb even the minority stakes on offer.
Read more at Financial Services Briefing: “Rights plan for ICBC” (July 28th)