China Citic Bank: Challenge Keeping 2nd Half CAR Above Regulatory Minimum

China Citic Bank Corp. (0998.HK), in which Spain's Banco Bilbao Vizcaya Argentaria SA owns a 15% stake, said Thursday keeping its capital adequacy ratio above the regulatory minimum in the second half wouldn't be easy ahead of a planned CNY26 billion (US$3.8 billion) rights issue.

The medium-sized bank said its CAR at the end of June was 10.95%, slightly above the 10% regulatory minimum for medium-sized Chinese banks.

Vice President Cao Guoqiang also said at a news conference the bank doesn't expect a big swing in its net interest margin in the second half compared with the first half if there are no interest rate hikes.

The bank said Wednesday its first-half net profit rose 45% from a year earlier to CNY10.69 billion, due to continued expansion in lending and an improved net interest margin.

-Victoria Ruan contributed to this article, Dow Jones Newswires; 8610 8400 7799; victoria.ruan@dowjones.com

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