China's largest commercial lender by assets has gained approval to raise up to 70 billion yuan ($10.4 billion) through the sales of preference shares.

The China Banking and Insurance Regulatory Commission has approved the bank's plan to issue no more than 700 million preference shares in the domestic market, the Industrial and Commercial Bank of China (ICBC) said in a statement filed to the Shanghai Stock Exchange.

The lender said it will follow through with other application procedures with regulators and submit information disclosures as required by law.

Data showed the non-performing loan ratio at ICBC was 1.52 percent by the end of 2018, down 0.03 percentage points from the end of 2017.

Preference shares, along with common shares, are two primary types of stocks that companies offer to investors. Preference shareholders have priority rights over ordinary shareholders in distribution of profits and residual assets.

Unlike common shares, preference shares function more like a bond. They are rated by major credit-rating companies and their prices are affected by changes in interest rates.