Core Viewpoint - The article discusses the active fundraising efforts of banks in the Hong Kong stock market, specifically highlighting Luzhou Bank's plan for a non-public issuance of H-shares to raise at least HKD 18.32 billion to strengthen its core tier one capital amid improving market conditions and economic recovery expectations [1][2]. Group 1: Fundraising Details - Luzhou Bank plans to hold its 2024 annual general meeting on June 30 to review the proposal for a non-public issuance of H-shares [1]. - The bank aims to raise a net amount of no less than HKD 18.32 billion, which will be used entirely to supplement its core tier one capital [2]. - The issuance is expected to involve at least six investors, with no single investor anticipated to become a major shareholder as a result of this issuance [2]. Group 2: Capital Adequacy and Market Context - As of the end of 2024, Luzhou Bank's core tier one capital adequacy ratio stands at 8.27%, which meets regulatory requirements but is below the average for national commercial banks [3]. - The expected issuance price will be no less than HKD 1.85 per share, significantly lower than the bank's audited net asset value per share of RMB 3.73 and the closing price of HKD 2.48 on June 9 [3]. - The low issuance price is attributed to the need for quick capital replenishment and the liquidity discount associated with H-shares [3]. Group 3: Broader Industry Context - There is a strong demand for capital replenishment among small and medium-sized banks, particularly in Sichuan province, with several banks like Chengdu Bank and Sichuan Bank also pursuing capital expansion [4]. - Challenges faced by smaller banks include limited internal capital replenishment capabilities and constraints on external fundraising due to regulatory requirements and higher costs compared to larger banks [4]. - Experts suggest that smaller banks should enhance their operational management, risk management, and explore various external capital replenishment channels to alleviate capital pressure [4].
港股银行板块持续活跃 泸州银行借势谋划定增