China Merchants Bank Rights Offering

Enhancing Capital and Supporting Business Growth

Through its support for China Merchants Bank, Goldman Sachs promotes entrepreneurship in China. We helped China Merchants Bank, the nation’s sixth-largest commercial bank, replenish its capital base by acting as Joint Sponsor and Joint Lead Underwriter for a $5.5 billion rights issue. Completed in October 2013, this transaction was the largest rights offering globally in 2013 and the largest rights offering in Asia outside of Japan since 2011.

The transaction supports the bank’s business growth and reinforces its leadership position in China’s banking sector. The rights issue seeks to enhance China Merchants Bank’s core capital adequacy ratio, thus helping the bank meet regulatory capital requirements. It seeks to expand the bank’s source of working capital and permit greater flexibility in managing capital. As part of its recapitalization, the bank aims to strengthen its internal risk management and lending procedures.

China Merchants Bank is a vital player in the country’s industrial restructuring and offers strong support for emerging industries and environmental and social practices. The bank promotes small and micro enterprise businesses, providing loans to these businesses of the equivalent of about $85 billion as of June 2013. As of the end of 2012, the Hangzhou branch of China Merchants Bank alone had issued loans for 34 conservation and emission reduction projects valued at 755 million RMB (US $123mm).