ICBC, AgBank's Capital Injections Seen in Line with Expectations

Dow Jones09-07

0606 GMT - Industrial & Commercial Bank of China's and Agricultural Bank of China's capital injections are likely to be in line with market expectations, say DBS Group Research analysts in a note. ICBC and AgBank are issuing A-shares to specific subscribers, with the Chinese finance ministry subscribing to a portion as it injects capital to strengthen the Chinese financial sector. The DBS analysts say the final pricing and share dilution of ICBC's and AgBank's share issuances are likely to be similar to those of Bank of China and China Construction Bank last year. The market is therefore unlikely to be surprised by an issuance price below 1X current price-to-book ratio. The improved common equity Tier 1 ratio of the lenders should help them further support China's economy, DBS adds.

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