The Industrial Bank (IB) published an announcement on the results of its share offering on June 1, which indicates that shares effectively subscribed to account for 99.25% of the placement shares. This is the highest subscription ratio in the A-share market since 2008, and marks the successful conclusion of the share offering.
According to the announcement, IB placed 2 shares per 10 to all shareholders as of the date of record, which was May 24, 2010. Payment for online subscription of shares was completed on May 31. As of the last date of subscription payment, the quantity of effective subscriptions was 992,450,630, accounting for 99.25% of the total 1,000,000,000 shares, with the total funds raised being RMB 17.864 billion.
The share placement plan shows that the placement funds will be used to supplement the bank's capital following the deduction of the relevant expenses. This will improve the capital standing of the bank and bolster the foundations for continued growth. It is expected that after implementation of the share placement, the rate of capital sufficiency of IB will increase to 12% and the rate of core capital sufficiency will exceed 9%, which will be sufficient to support the business development of the bank for the next two or three years.
Several research institutes have estimated that without considering the share placement, the average earning per share (EPS) of IB in 2010 will be RMB 3.18, representing an increase of 19.55% when compared to the RMB 2.66 in 2009. This means that the profit growth of IB in 2010 will be able to counteract the dilution of EPS caused by share placement. In addition, after the share placement, the capital growth of IB will support the faster expansion of IB's business scale and will urge the further growth of profit, so the actual situation might even be better than expected. Therefore, the share placement will not exert material influence on the overall business indicators of IB, instead it will be indispensable for IB's long-term planning and future development.
According to IB, the bank will continue its commitment to promoting the transformation of its business development mode and profiting mode, and will continue to enhance its profitability and performance. Meanwhile, the bank will stipulate a stable cash bonus policy, thus maintaining a sound policy of profit accumulation and properly supplementing funds through multiple channels so as to realize a balance between endogenous capital growth and risk assets growth.