Shanghai Pudong Development Bank plans to issue 800 million additional shares to raise about 24.9 billion yuan (US$3.5 billion) to replenish capital, the bank said in a statement yesterday.

The bank will also offer a cash dividend of 1.6 yuan for each 10 shares. It will also offer a dividend of three new shares per 10 shares for existing shareholders, the bank said.

The bank said on February 21 that it was mulling over a plan to sell additional shares but details were not then settled as it considered the response to market speculation that the bank might sell one billion new shares to raise about 40 billion yuan.

Analysts said the shares sale is being made to boost the bank's capital.

The bank's capital adequacy ratio sat at 9.15 percent at the end of last year. It is higher than the regulatory minimum of 8.0 percent and down from the bank's 9.27 percent level at the end of 2006.

The shares sale will help boost its capital adequacy ratio to 11 percent.

The bank said yesterday its 2007 profits grew 63.85 percent to 5.5 billion yuan. The revenue gained 36.7 percent to 25.9 billion yuan.

The bank yesterday signed a memorandum of understanding with Citigroup to tie up the investment banking sector, a Citigroup spokeswoman said.

Pudong Bank ended at 40.62 yuan yesterday in Shanghai, up 0.32 percent. The benchmark Shanghai Composite Index increased 2.26 percent to 4,334.05.

(Shanghai Daily, February 28, 2008)