February 17 -- China Pacific Insurance Group intends to acquire a stake in Bank of Tianjin for 520 million yuan, reports 21cbh.com, citing unnamed sources close to the insurer.
According to the sources, China Pacific Insurance Group plans to buy 100 million shares in the bank.
The transaction is pending the approval of the authorities.
According to the report, the implementation of the Basel III Agreement and the move by the Chinese regulators to implement a differentiatied reserve ratio policy had led to banks facing pressures to boost their capital.
Bank of Tianjin plans to raise 4.2 billion yuan through the issue of shares to existing and new shareholders at 5.2 yuan per share.
The issuance price of 5.2 yuan is lower than the price of six yuan when shareholders of the bank transfered some of their holdings at the Beijing Equity Exchange in June last year.
The bank recorded net assets of 8.27 billion yuan, total assets of 149.3 billion yuan, and net profit attributable to shareholders of 1.31 billion yuan as of end 2009.
Based on total equity of 2.73 billion shares, the bank’s basic earnings per share (EPS) was 0.48 yuan per share in 2009.
The bank’s core capital adequacy ratio was 12.34 percent as of end 2009, with a non-performing loan ratio of 1.54 percent.
According to public figures, Tianjin Port Free Trade Zone Investment is the largest shareholder of the bank with a stake of 27.47 percent. ANZ Bank is the second largest shareholder with a 20 percent stake.
ANZ Bank will invest 832 million yuan in the bank’s share issuance in order to avoid dilution.
China Pacific Insurance Group invested 1.3 billion yuan in November 2010 to buy 100 million shares of Bank of Hangzhou.
The group invested approximately 1.3 billion yuan to subscribe to 200 million shares of Shanghai Rural Commercial Bank in the second half of 2010.
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