Inustrial and Commercial Bank of China plans to sell new shares and raise up to 25 billion yuan (US$3.66 billion) through convertible bonds sales over the next three years.

The world's biggest lender by market value yesterday joined a number of other Chinese banks seeking fresh money as record credit growth in 2009 eroded capital.

ICBC will sell up to 25 billion yuan in bonds convertible into Shanghai-traded A shares, and has left open the option of selling additional Hong Kong-listed H shares pending shareholder approval.

The Beijing-based bank outlined the game plan in a filing to the Hong Kong Stock Exchange.

The initiatives would negate further fund raising for at least three years after the move, Jiang Jianqing, chairman of the bank, told reporters in Hong Kong.

"We turned to the dual-market fund-raising plan because it cuts the pressure on a single market," the bank said in a statement.

The bonds will bear an annual interest rate of up to 3 percent.

The bank's capital-raising plan did not surprise analysts, following a trend set by a number of smaller banks.

The China Banking Regulatory Commission ordered its big five state-owned banks to meet at least an 11 percent requirement on their capital adequacy ratio.

ICBC's capital adequacy ratio dropped to 12.36 percent at the end of 2009, down from 13.06 percent at the start of the year.

"The bank isn't short of money at this stage but needs fund raising to pave the way for future growth," said Qiu Zhicheng, a Guosen Securities Co analyst.

"That may explain why its capital-raising scale is less than that of its rivals."

Meanwhile, ICBC yesterday announced it posted a slower-than-expected profit growth in fourth quarter of last year.

Its net income rose 58 percent to 28.6 billion yuan in the fourth quarter, from 18.11 billion yuan a year ago.

Its yearly profits grew 16 percent to 128.65 billion yuan last year, the weakest result since 2004.

The bank extended record new credit of 1.1 trillion yuan last year but its interest income fell 6.5 percent to 24.58 billion yuan.

The bank's shares inched down 0.2 percent to 4.87 yuan in Shanghai yesterday.

Its H shares dropped 1.4 percent to HK$5.66 (73 US cents) in Hong Kong.