CITIC Industrial Bank is expected to receive 8 billion yuan (US$986 million) in a capital top-up from parent company CITIC Group to boost its capital adequacy ratio above 8 percent, the industry watchdog's baseline for joint-stock banks.

The cash injection is also considered an essential move to strengthen CITIC Industrial Bank's listing plan. Chen Xiaoxian, vice-president of CITIC Group, said in August that preparing for listing is a key focus for the coming year.

"The capital injection is likely to be completed by the end of this year," said Cao Tong, assistant president of CITIC Industrial Bank yesterday.

The bank is one of 19 joint-stock banks in the country.

Another top manager, who did not want to be named, said CITIC Group would raise the money by issuing bonds valued at 9 billion yuan (US$111 million) very soon, with most of the raised capital going to the bank.

Market reports said that CITIC Industrial Bank is also considering issuing subordinated bonds ranging from 5 billion yuan (US$617 million) to 8 billion (US$987 million), if necessary.

CITIC Group's move follows a capital injection of some 3.7 billion yuan (US$457 million) into the banking unit last year. That was made up of 2.5 billion yuan (US$309 million) of core capital and 1.258 billion yuan (US$155 million) of subordinated capital, taking the lender's capital adequacy ratio to 6.02 percent by the end of 2004.

(China Daily October 12, 2005)