City commercial banks look for new capital

City commercial banks, regional lenders that are mostly under private ownership, are turning to the financial markets ever more this year as they try to accelerate their expansions.

So far this year, the institutions have made plans to raise more than 50 billion yuan ($7.99 billion) in the year, using either bond issuances or sales of equity.

Most recently, Hankou Bank Co Ltd in Wuhan, Hubei province, announced plans to sell 950 million shares to raise between 3.61 billion and 3.8 billion yuan. The offer price, which will come out to between 3.8 yuan and 4 yuan a share, is 60 to 70 percent higher than the lender's book value per share at the end of 2011. The premium is widely considered as too high, especially in light of bank shares' recent poor performance on the secondary market.