China Banks’ Share Sales to Damp Profit in Vicious Cycle

China’s biggest banks, already poised for the weakest profit growth in more than a decade, risk a further erosion in earnings from record share sales intended to boost their capital after a credit binge.

Industrial & Commercial Bank of China Ltd., the nation’s largest lender, and its listed peers this year proposed selling $63 billion of preferred and common stock, exceeding U.S. and European banks’ combined $56 billion, according to data compiled by Bloomberg. The five biggest Chinese banks report second-quarter earnings beginning tomorrow.