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UPDATE 1-China's CITIC Bank says may issue new shares

HONG KONG, May 10 (Reuters) - China's CITIC Bank is considering an issue of new shares to raise capital, its chairman said on Monday, as Chinese lenders look to bolster their balance sheets following a lending binge last year. Bigger rivals such as Industrial and Commercial Bank of China (ICBC) and Bank of China have already announced plans to raise up to $15.4 billion in new cash, as they rush to replenish capital amid moves by the authorities to tighten lending. "Issuing new shares is one important way we can raise capital," Bank Chairman Kong Dan told reporters. "We will seriously look at selling new shares to raise capital because we can see that the regulatory requirements are getting higher." In March, CITIC Bank said it expected to issue up to 25 billion yuan ($3.7 billion) worth of subordinated and hybrid bonds in the first half of the year to replenish its capital. "Currently, we have no plans to issue new shares and we're still using bonds to raise funds," Kong said. Chinese banks could collectively request $60 billion or more from investors in Hong Kong and Shanghai, seriously testing appetites for providing new funding to a group that doled out a record $1.4 trillion in new loans last year. Citic Bank's largest shareholder is unlisted Citic Group, which is also headed by Kong. Besides the bank, it owns a stake in Citic Securities, China's largest listed brokerage. The bank is also applying for a banking licence in Singapore as part of a broader plan to become a financial conglomerate, and has set its eyes on Australia and Taiwan for further expansion. China and Taiwan signed a financial services pact in November last year, paving the way for banks on both sides to invest in each other and operate on both sides of the Taiwan strait. "We haven't decided if we should open a branch or a representative office in Taiwan, but we will have a decision by the end of this year," said Kong. Citic Bank's Hong Kong-listed shares have lost over a quarter of their value so far this year, lagging a 6 percent decline on the benchmark Hang Seng Index (Reporting by Kelvin Soh, writing by Doug Young; Editing by Chris Lewis) ((doug.young@thomsonreuters.com; +852 2843-1631; Reuters Messaging: doug.young.reuters.com@reuters.net)) Keywords: CITICBANK/ Keywords: CITICBANK/ (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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