The bank, China's fifth biggest lender in terms of assets, said it aimed to raise 33.1 billion yuan (4.85 billion dollars) from the rights issue, according to statements filed with the Shanghai and Hong Kong stock exchanges Sunday.

The size of the planned rights issue, designed to replenish capital after massive lending in 2009, is much smaller than the original target of 42 billion yuan announced in February.

Shanghai-listed shares of Bank of Communications closed down 3.29 percent at 6.18 yuan. The overall market fell 1.64 percent.

Qian Wenhui, a vice president at the bank, told a media briefing Monday that the original 42 billion target was a top-line estimate, according to Dow Jones Newswires.

"When we plan fundraisings, we must consider market conditions, the bank's need for business expansion and shareholders' interest," Qian was quoted as saying.

The benchmark Shanghai Composite Index has lost 24 percent so far this year while the Hong Kong index has fallen 12 percent.

The bank will sell 3.89 billion yuan-denominated A shares in Shanghai at 4.5 yuan each and 3.46 billion Hong Kong dollar-denominated shares in Hong Kong at 5.14 Hong Kong dollars each, according to the statements.

HSBC, which holds about 19 percent of Bank of Communications, said it will subscribe for its full entitlement, or 1.4 billion H-shares.

China's banks are rushing to raise tens of billions of dollars from the stock market after being ordered by regulators to strengthen their balance sheets following a government-backed lending spree last year to boost growth.

Several other listed banks, including the top three -- Bank of China, China Construction Bank and Industrial and Commercial Bank of China -- are seeking to raise tens of billions of dollars between them.

Agricultural Bank of China, is also expected to raise tens of billions of dollars through an initial public offering soon.

The bank, the last of China's "big four" state lenders to float, is seeking to sell 22.235 billion A shares, or seven percent of its enlarged share capital, in Shanghai and 25.412 billion H shares, or eight percent of its enlarged share capital, in Hong Kong.

The IPO has an over-allotment option, which allows the underwriter to sell more shares to investors than originally agreed if demand is high, according to a preliminary prospectus posted on the China Securities Regulatory Commission's website late Friday.

If exercised, the bank could issue up to 25.571 billion A shares and 29.223 billion H shares.

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