China Merchants Bank to launch $5.4bn rights issue

The lender to issue up to 2.2 shares for every 10 existing shares to comply with stricter capital requirement in China.

China Merchants Bank will raise up to 35 billion yuan ($5.4 billion) in a Hong Kong and Shanghai rights issue to replenish its capital.

China's sixth-largest bank by market value will issue up to 2.2 shares for every 10 existing shares, it said in a statement posted on the Hong Kong stock exchange, according to a report in Reuters.

Other banks such as Industrial and Commercial Bank of China have also raised funds during the past two years to meet tougher capital requirements and strengthen their balance sheets.