ICBC stockholders okay convertible bond, share sales

Approval enables company to raise $3.7bln and to join rivals in shoring up capital.

Industrial & Commercial Bank of China Ltd., the world's largest lender by market value, won shareholder approval to raise as much as 25 billion yuan ($3.7 billion) selling bonds to shore up capital.

Investors also gave the lender a general mandate to sell shares equivalent to as much as 20 percent of outstanding equity in Hong Kong and Shanghai, Wang Chixi, a supervisor at the bank, said at a shareholder meeting in Beijing Tuesday. ICBC hasn't decided the terms of the sale, Chairman Jiang Jianqing said.

ICBC, also the world's most profitable bank, joins state-controlled rivals Bank of China Ltd., China Construction Bank Corp. and Bank of Communications Co. in raising funds after a record 9.59 trillion yuan ($1.4 trillion) of new loans last year weakened balance sheets and the regulator increased requirements for financial buffers.

The nation's four biggest publicly traded banks need at least 480 billion yuan ($70.29 billion) of additional capital over the next five years to fund loan growth and meet the 11.5 percent capital adequacy ratio requirement, ICBC President Yang Kaisheng wrote in the 21st Century Business Herald last month.

View the full story in Business Week.