On December 8, the first Provisional General Shareholders' Meeting of the Industrial Bank (IB) in 2009 adopted a share placement scheme aimed at raising no more than RMB 18 billion in funds. Almost seventy percent of the bank's shareholders voted on the proposal in person or over the internet. The proposal was supported by 99% of the votes in a large show of unanimity among shareholders of the Industrial Bank.
According to the re-financing plan published on November 21, the Industrial Bank will offer a maximum of 2.5 shares for every 10 shares, thereby raising a maximum of RMB 18 billion in capital. Share prices are confirmed in consideration of transactions in the A-share market before the publishing of the issuance announcement. The prices are determined by the BOD under the authorization of the general shareholders' meeting in conjunction with the sponsor/lead underwriter according to the market price discount method, wherein, the price of share placement shall not be lower than the net assets per share prior to the issuance thereof.
Regarding plans to increase the scale of operations over the next three years, IB management expressed that the outlook on China economy remains favorable, and that in consideration of the circumstances of the bank, rapid growth of business operations is expected to be maintained over the coming years.
As for objectives regarding the capital adequacy ratio, IB holds that, in accordance with the Capital Management Plan for 2009-2012 and recent regulatory requirements regarding the capital of small and medium-sized banks, the bank's capital adequacy ratio and core capital adequacy ratio may not fall below 10% and 7% respectively at any point over the next three years. Therefore, the bank will try to maintain more sufficient capital reserves as a buffer.
According to IB, the bank's capital adequacy ratio and core capital adequacy ratio are expected to reach over 12% and 9% respectively after the share placement. In combination with internal accumulations and proper supplement of subordinate capital, financing from the share placement can satisfy the demands of business development for the next three years.