HONG KONG: China’s banks exist in a capital-raising conundrum. Other lenders from Ping An Bank Co. to China Citic Bank Corp. have also announced plans this year to sell convertible bonds.The case for capital raising, especially for joint-stock banks, is clear. The banking regulator said last month it will change rules to support commercial banks’ sales of capital tools including perpetual bonds. With these instruments, you can gradually convert over time.”Strengthening the joint-stock banks’ capital position is good for their long-term stability, but for now their stocks are still being battered by concerns over tighter regulation. “The government looks serious in its willingness to solve the banking problem and more broadly the debt problem.” - Bloomberg

Source: The Star April 04, 2018 02:48 UTC