China Merchants Bank Co, sixth largest bank in China announced on Friday that it would lift 15-18 billion Yuan (equivalent to 2.20-2.63 billion dollars) through a rights issue to improve its capital adequacy ratio.

The lender will issue as many as 3.8 billion new shares. But it will offer only two shares for every 10 shares held by the current A and H shareholders.

The plan is yet to be approved by the shareholders and Chinese regulators.

81.9% of the China Merchants' available 19.12 billion shares are Shanghai-listed A-shares, while the rest are Hong Kong-listed H shares.

On Thursday, A-shares and H-shares closed at 17.68 Yuan and HK$17.72 respectively in Hong Kong.

It should be noted here that last year China Merchants Bank had acquired 53.12% stake in Wing Lung Bank in a deal worth 2.47 billion dollars. That deal deteriorated its capital.