Preferred shares may erode bank profits

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 spree.

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 United States and European banks' combined $56 billion, according to data compiled by Bloomberg.

The five biggest Chinese banks report second-quarter earnings starting on Tuesday.