Bank of China gets nod for 23 bln subordinated debts

The Bank of China has been given approval to issue 23 billion yuan (3.65 billion U.S. dollars) of subordinated debts in the inter-bank bond market.

The debts will be the fourth such kind since the bank's shareholders agreed to issue no more than 120 billion yuan of subordinated debts by the end of 2012 in a meeting held in 2009, the bank said in a statement late Thursday.

Bank of China, the country's fourth-largest state-owned bank, sold 40 billion yuan subordinated debts in July 2009, 24.93 billion yuan in March 2010, and 32 billion yuan in May 2011.

Its latest financial report showed that net profits rose 10.37 percent from a year earlier to 106.36 billion yuan in the first three quarters. Its liabilities reached 11.92 trillion yuan by September, a rise of 7.6 percent.

Subordinated debts have become an important tool for Chinese commercial banks to replenish capital over recent years amid government efforts to contain inflation.

To regulate the market, the China Banking Regulatory Commission in June introduced a trial regulation on banks capital management, which is expected to come into effect Jan. 1, 2013.