Private Placement Issuance Price Unlikely to be Adjusted

The China Securities Regulatory Commission (CSRC), the securities regulator in China, has approved Hua Xia Bank Co., Ltd. (600015. SH) to place yuan-denominated A-shares with three existing shareholders, namely Shougang Group Co., Ltd., State Grid Corporation, and Deutsche Bank AG, Hua Xia Bank announced on Monday, 18 Aug 2008.

In spite of a continuous decline of stock price on the A-share market, senior management from Hua Xia Bank made it clear that the issuing price for its shares will not be adjusted, at an analysts symposium held in the banks Beijing headquarters recently.

Hua Xia Bank’s 2008 Semiannual Report disclosed that, as of 30 Jun 2008, Shougang Group was its largest shareholder with a 10.19% stake, State Grid was its second-largest shareholder with an 8.15% stake and Deutsche Bank AG was its fourth-largest shareholder with a 7.02% stake. Upon completion of the private placement, it is predicted that Shougang Group will hold a 13.98% stake in Hua Xia Bank, State Grid will hold an 11.97% stake and Deutsche Bank will hold a 10.68% stake.

According to a plan from senior management, the new core capital will be used gradually within the next two years, thus the core capital adequacy ratio will not return to the current level until 2010-2011.

The company's asset quality remains high, senior managers from the bank said, the bank plans to retain RMB 3.2 bln in provisions for write-downs in 2008, of which approximately RMB 2.1 bln has been retained.


Source: China Business News

Date: 19 Aug 2008

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