Asia-Pacific banks raised US$19.46b in common equity in 2014

Chinese banks dominated preferred equity offerings.

Common equity offerings from Asia-Pacific banks fell year over year in 2014, but preferred equity offerings significantly outpaced prior-year totals.

According to a release from SNL Financial, based on data that it compiled, SNL-covered Asia-Pacific banks raised US$19.46 billion in common equity during the year, compared to US$35.72 billion in 2013.

The region's banks raised US$29.03 billion in preferred equity, compared to US$4.44 billion in the prior year.

Banks headquartered in China dominated preferred equity offerings in 2014, accounting for roughly 98% of all preferred equity raised by Asia-Pacific banks. The country did not allow for the issuance of preference shares until regulators unveiled new rules in April 2014.

Bank of China Ltd. became the first Chinese bank to issue such shares when it raised US$6.52 billion in an October 2014 sale of noncumulative offshore preference shares; the bank also raised US$5.23 billion in an issuance of onshore preferred shares in November 2014.

Here's more from SNL Financial:

Common equity offerings were more dispersed than preferred equity offerings, with seven different Asian-Pacific countries seeing banks launch at least five common equity offerings during 2014.

Singapore-based Oversea-Chinese Banking Corp. Ltd.'s US$2.64 billion rights offering, which was completed Sept. 15, 2014, was the largest common equity offering of the year. The bank said proceeds from the offering would be used to strengthen its balance sheet and provide the bank with additional financial flexibility.

Two Malaysian banks had offerings in the top five list for the year. Public Bank Bhd.'s US$1.52 billion rights offering, which was completed July 18, 2014, was the second-largest common equity offering of the year, while CIMB Group Holdings Bhd.'s US$1.07 billion follow-on offering, completed Jan. 22, 2014, ranked fifth. Both banks planned to use the proceeds to bolster working capital and for general business purposes.

Hongkong & Shanghai Banking Corp. Ltd. took third place with a common stock offering that was completed June 27, 2014, and netted US$1.38 billion, and State Bank of India's Jan. 30, 2014, follow-on offering, which raised US$1.28 billion, rounded out the top five.

On the preferred equity offering front, Chinese banks launched six of the 11 offerings of 2014. The largest preferred offering was Agricultural Bank of China Ltd.'s private placement preferred equity offering, which was completed Nov. 13, 2014, and raised US$6.53 billion. The proceeds were used to replenish Tier 1 capital.