2012: Capitial Raising II Year For China Banks 2012：中国银行业的又一个融资年
I don’t usually like to congratulate myself for making correct predictions, but in this case it does seem my mid-year forecast of a major new round of fund-raising by Chinese banks may soon occur in the new year as many look to repair their stressed-out balance sheets. I made my prediction back in July when China Merchants Bank (HKEx: 3968; Shanghai: 600036), one of the nation’s top regional players, announced plans to raise up to $5.4 billion — its second major capital raising after it and most of the country’s top banks raised hundreds of billions of dollars in 2009. (previous post) Now one of China’s top financial newspapers, citing analysts, is reporting that many of the nation’s other major banks, including big names like Agricultural Bank of China (HKEx: 1288; Shanghai: 601288) and Bank of Communications (HKEx: 3328; Shanghai: 601328) may also have to raise more cash next year to shore up their balance sheets that are coming under pressure after a lending binge in 2009 and 2010 under Beijing’s massive stimulus spending plan to support the economy during the global financial crisis. (English article) The China Securities Journal, considered the most authoritative of China’s major financial dailies, says banks may need to raise more than 100 billion yuan, or nearly $16 billion, collectively next year, and I wouldn’t be surprised if the final number is significantly higher, perhaps 4 or 5 times that amount, as Beijing tries to prepare its major lenders for a coming boom in bad loans resulting from an anemic stock market and a major looming downturn in real estate. In a sign of things to come, Ping An (HKEx: 2318; Shanghai: 601318), China’s second largest insurer and one of its most aggressive financial services companies, earlier this month announced a plan to raise more than $4 billion, after it raised another $2.5 billion earlier this year through a private placement. (previous post) It seems natural that the most aggressive companies like Ping An will have to go to market first for new funds when this kind of downturn happens, but look for lots of similar announcements in the year ahead by both banks and insurers.
Bottom line: 2012 will be a year of major capital raising for Chinese banks and insurers, whose bad debt could balloon as a result of prolonged downturns in the stock and real estate markets.
Related postings 相关文章:
◙ Ping An Returns to Market With Second Big Fund Request 中国平安拟发大规模可转债
◙ China Readies Market for More Bank Begging 中资银行准备再筹资
◙ China Merchants Bank Kicks Off “Capital Raising II” 招商银行掀起第二轮融资热潮
