The Agricultural Bank of China Ltd will be issuing 90 billion yuan or US$14.59 billion worth of bonds that are eligible for regulatory capital treatment. In a statement, nearly 40 billion yuan of the bonds would be eligible for Tier 1 capital treatment and the remainder covered under Tier 2 treatment.
The treatments of the capital bonds are mandated under the new capital rules instituted in China. Included in the bonds are provisions that it would be written off when specific loss conditions occur during the life of the bond.
This program is subject to regulatory approval from the Agricultural Bank of China's shareholders and the China Banking Regulatory Commission.
The country's third largest lending institution said that its net profit was at 47 billion yuan for the first quarter of 2013. This is within the forecasted 46.4 billion yuan for the company. The figures were met because of strong growth earnings in the rural provinces.
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