INDUSTRIAL and Commercial Bank of China Ltd. (ICBC), the country’s largest listed bank, said Friday it plans to issue up to 80 billion yuan (US$12.9 billion) worth of preferred shares, becoming the latest Chinese bank to use the instrument to tap the capital markets.

    ICBC will issue as much as 45 billion yuan in preferred shares in the domestic market and up to 35 billion yuan of such shares in foreign markets.

    The planned offering comes after a regulatory change unveiled in April that allows Chinese banks to address tougher capital rules by using preferred shares. The additional funds will also help lenders deal with a slowing economy and rising bad debt.

    Agricultural Bank of China Ltd. and Bank of China Ltd. said earlier this year they planned to issue preferred shares worth billions of dollars.

    The Chinese Government has been rigorously enforcing these regulations in its efforts to ward off a financial crisis following a huge run-up in debt since 2008 and a marked slowdown in the economy.

    China’s banks will have a ready-made investor base for these preferred shares because many of the buyers are State-owned, or have links to the government. Most of the preferred shares will be placed privately. Analysts expect most of the investments to come from State-owned insurance firms and funds raised via other banks’ wealth management products. (SD-Agencies)