Bank of Communications' (HKG:3328, SHA:601328) unit, Bank of Communications (Hong Kong), plans to convert its retained earnings of up to HK$7.1 billion into its capital stock, according to a Shanghai Stock Exchange filing on Monday.

The Chinese lender's board of directors approved the proposal.

After the transaction, BOC HK's share capital will increase to HK$45 billion from HK$37.9 billion. The parent will maintain its wholly-owned controlling holdings in BOC HK.