SINGAPORE (Reuters) – Chinese commercial lender Industrial Bank Co Ltd. plans to raise up to 26 billion yuan ($3.9 billion) in a private placement of shares to shore up its capital in the face of a slowing domestic economy.

Industrial Bank, based in the southeastern province of Fujian, plans to issue up to 1.72 billion domestically listed A-shares at 15.10 yuan apiece, it said on Friday in a filing to the Shanghai stock exchange.

“Competition among commercial banks in China is intensifying and it is becoming ever so important that banks ensure their capital base is strong,” the lender said.

The funds will be used to boost its core tier-1 capital, which is a measure of a bank’s financial health.

The placement plan comes against the backdrop of easing Chinese economic growth and mounting worries about the health of the country’s banking sector, with commercial banks’ loan defaults at their highest level since the global financial crisis in 2009.

($1 = 6.6480 Chinese yuan renminbi)

(Reporting by Lee Chyen Yee and Twinnie Siu; Editing by Mark Potter)

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