March 25 - ICBC Board of Directors adopted the proposal to issue under RMB 25 billion of A-share convertible corporate bonds in the A-share market, and not more than 20% of H-share capital in the H-share market. The proceeds will be used to supplement the capital. The above proposal is still pending for approval by ICBC Shareholders Meeting. Once approved, ICBC will choose the right opportunity to issue A-share convertible corporate bonds and H shares in line with the market situation, fund requirement and investor wishes.

Beginning from 2009, ICBC adheres to the State macro control policy and plays its role as a large bank to support the economy to "rally and prosper". The outstanding RMB loan balance in all domestic branches stands at RMB 1035.2 billion. Loans are growing at 24.2%, a sharp surge over the past years. By the year-end 2009, ICBC kept its capital adequacy ratio and core capital adequacy ratio at 12.36% and 9.9% respectively, sailing far above the percentage stated in the regulatory rules and ahead of the peers.

In 2010, regulatory bodies around the world are asking the commercial banks to increase their capital adequacy ratio. In particular large banks that closely related to the national economy and livelihood of all will be subjected to more stringent regulation on their capital. Next item on ICBC's agenda is to define better ways to supplement the capital in order to maintain sustainable high level of quality and adequacy ratio. At this time around, ICBC chooses to increase capital by issuing A-share convertible corporate bonds in the A-share market and H shares in the H-share market, within the current capital regulatory framework and taking all the factors into considerations in terms of regulatory rules, market demand, financing cost and efficiency, and the impact to the market. The proposal of raising capital from two markets relieves the pressure of relying on one single market. Meanwhile, convertible bonds are a good option for varied A-share investors to invest since they offer the value of debt-to-equity swap and guarantee on the principal and minimum yield.

Analysts said that ICBC is taking on a forward-facing dimension based on the current situation. The move is considered as an effort to add capital ahead of the schedule. This helps the investors to understand the expected and boosts the steady development of the market.