August 29, 2013 / 1:37 AM / 4 years ago

China's AgBank tells analysts it's considering raising funds

HONG KONG, Aug 29 (Reuters) - Agricultural Bank of China , the country's third-largest bank, told analysts in a briefing on Wednesday that it is considering raising capital by issuing preferred shares.

AgBank issued earnings on Wednesday, disclosing a quarterly profit that beat expectations, though the bank warned of a challenging climate ahead. It did not mention raising capital in its earnings report.

Analyst reports issued after the results referenced the capital raising from a briefing the bank held with the analysts that cover the company.

"Management said that the bank is currently considering issuing preferred shares (still in the study stage); once approved by the regulator, ABC will be among the first batch of banks to issue," Barclays said in a research note.

At least two other notes mentioned the fund-raising plan.

The bank was not immediately available for comment.

AgBank's core capital adequacy ratio - a measure used to value the strength of a bank's cash position - stood at 9.1 percent at the end of the first half. That was the lowest among China's Big Four banks.

"ABC management said it has no plans for equity raising in the near term. Instead ABC said it would explore opportunities to issue preferred shares or other tier 1 instruments," Daiwa Capital Markets analysts Grace Wu and Leon Qi wrote in a research note. (Reporting by Michael Flaherty; Editing by Ryan Woo)

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