(Yicai Global) March 30 -- Shares of Postal Savings Bank of China rose after China Mobile invested CNY45 billion (USD6.5 billion) to become the state lender’s second-largest domestic shareholder.

Postal Savings Bank [SHA: 601658] closed 3.7 percent higher at CNY4.82 (70 US cents) a share in Shanghai today. In Hong Kong, the bank’s stock [HKG: 1658] ended up 1.7 percent at HKD4.91 (63 US cents).

China Mobile bought 6.8 billion shares of Postal Savings Bank for CNY6.64 (96 US cents) apiece, a 43 percent premium on yesterday’s closing price, through a private placement, the Beijing-based commercial lender said in a statement yesterday. China Mobile now owns 6.8 percent of Postal Savings Bank.

China Post Group will remain Postal Savings Bank’s largest shareholder, though its stake will fall to 62.8 percent from 67.4 percent. Hong Kong investors own a collective 20 percent of the bank through accounts on Hong Kong Securities Clearing’s trading platform.

China Mobile’s stock price [SHA: 600941] fell in Shanghai, losing 2.8 percent to finish at CNY86.34 (USD12.56), while is Hong Kong-listed shares [HKG: 0941] rose 0.6 percent to HKD62.35 (USD7.94). 

The proceeds of the private placement will be used to supplement Postal Savings Bank’s core tier-one capital, the lender said. It had core tier-one capital adequacy ratio and capital adequacy ratio of 9.55 percent and 14.1 percent, respectively, at the end of last September. According to GF Securities, the figures will rise to 10.18 percent and 14.74 percent after the private placement.

This was not Postal Savings Bank’s first private placement. The company announced in March 2021 that it was planning to issue 5.4 million A-shares, those traded in the Chinese mainland, to raise CNY30 billion from China Post.

Postal Savings Bank reported a net profit of CNY73.8 billion in the nine months ended Sept. 30, up 14.5 percent from a year earlier, according to its last earnings report. Revenue rose 7.8 percent to CNY256.9 billion (USD37.2 billion).

It was also not the first time China Mobile bought shares in a Chinese bank. China Mobile Group Guangdong subscribed to buy 2.9 billion shares of Shanghai Pudong Development Bank in October 2021, equal to 20 percent of the total, for CNY39.2 billion.

China Mobile said in its 2022 earnings report released on March 23 that annual net profit rose 8.2 percent to CNY125.5 billion from the previous one. Revenue was CNY937.3 billion, an increase of 10.5 percent in the period.

Editor: Futura Costaglione