INDUSTRIAL Bank Co plans to raise as much as 50 billion yuan (US$6.6 billion) in a bond sale to pool capital for lending.
The company will sell 10-year debt on China's interbank bond market, it said in a filing to the Shanghai Stock Exchange yesterday.
The specific terms and time frame of the sale will be decided later this year and are subject to regulatory approval.
"The size of the financial bond sale is relatively a big one for a joint-stock bank," said She Minhua, a China Securities Co analyst.
Financial bonds, unlike subordinated bonds, will not be included in bank's capital, but as debt. The move is mainly aimed to supplement its shortage of deposits, he said.
Investors are channeling deposits to the country's booming stock market.
Industrial Bank's deposits grew three percent in the first half, leaving it facing a funding shortfall after loans grew 17 percent in the period.
The firm also needs money for buying and diversification into wealth management.
The Fujian Province-based lender said yesterday it plans to buy a small rival in the northeastern city of Harbin in Heilongjiang Province for up to 17 million yuan and will set up a fund-management venture with Natixis SA, France's fourth-largest bank by market value, to tap into the country's fund-management market.
The fund market raised 192.86 billion yuan in the first half, slightly lower than the 195.42 billion yuan a year ago.
The bank's first-half profits more than doubled to 3.63 billion yuan. Its earnings per share rose from 0.44 yuan to 0.75 yuan. Its capital adequacy ratio sat at 11.24 percent at the end of June
Hang Seng Bank, Hong Kong's second-largest by assets, owns 12.78 percent of Industrial Bank. Shares of Industrial Bank yesterday surged 8.78 percent to 50.90 yuan.