Merchants Bank sees no need for extra capital after rights issue
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China Merchants Bank said yesterday it will not need to raise additional capital for the next three years after its recent launch of a US$3.2 billion rights issue to shore up its balance sheet.
Qin Xiao, chairman of both the bank and China Merchants Group, made the comments on the sidelines of the annual Chinese People's Political Consultative Conference as many Chinese banks look to raise capital following aggressive lending last year under China's economic stimulus program.
Chinese banks lent a record 9.6 trillion yuan (US$1.4 trillion) in new loans last year, fueling concerns that they were sowing the seeds of a new crop of bad debts.
Earlier this week, the bank said it would launch the rights issue, following domestic peers such as the Bank of Communications and the Bank of China.
Qin added that the overall pace of lending by Chinese banks this year should be lower than in 2009.
