China Merchants Bank gets nod on rights issue

Regulator's approval could bring in additional $3.2 billion after lender's expansion.

The Securities Regulatory Commission examined the bank's application and the "rights issue has been approved," China Merchants Bank said in a report in Market Watch.

The bank had originally announced its intention for the offering in August, saying it would offer shareholders up to 2.5 shares for every 10 shares they already own, in an effort to raise between 18 billion yuan ($2.64 billion) and 22 billion yuan ($3.22 billion).

China Merchants Bank is one of a number of mainland China lenders looking to capital markets to raise funds "after Chinese banks extended a record 9.6 trillion yuan ($1.4 billion) in new loans last year, according to a Dow Jones Newswires report.

The report cited unnamed sources saying that the bank has hired China International Capital Corp. and UBS AG to underwrite the issue.