SHANGHAI Pudong Development Bank Co. shares slumped by the most in almost seven months Friday after the bank unveiled plans to raise 14.8 billion yuan (US$2.3 billion) in a private share placement to bolster capital.

    The bank’s Shanghai-listed stock sank 8.02 percent to close at 16.97 yuan, the biggest intraday drop since Aug. 24.

    Shanghai Pudong plans to issue as many as 921.7 million shares at 16.09 yuan each to Shanghai International Group Co. and Shanghai Guoxin Investment Development Co., the company said in a statement Friday.

    The bank will face a capital shortfall of as much as 61 billion yuan by the end of 2018, including a gap of 39 billion yuan in core Tier-1 capital, it said.

    The fundraising was part of Shanghai Pudong’s capital planning for the next three years, during which it expects assets and earnings growth to slow, it said in a separate statement. Its capital adequacy ratio stood at 12.33 percent at the end of September, lower than the industry’s weighted average of 13.15 percent, regulatory data show.

    “The private placement is not a big surprise as the bank’s capital adequacy ratio has been weak,” said Ma Kunpeng, a Shanghai-based analyst with Sinolink Securities Co. “This should be just an isolated case because the capital position of the industry is still adequate at the moment.”

    Shanghai International owns 16.9 percent of the bank, while Shanghai Guoxin holds 2 percent. Combining holdings by its other units, Shanghai International will remain the bank’s largest shareholder after the share placement, which will require regulatory approval, Shanghai Pudong said.

    Shanghai International will subscribe to a maximum 621.7 million of the bank’s shares, while Shanghai Guoxin will buy 300 million shares, Shanghai Pudong said.

    (SD-Agencies)