Core Tier 1 Capital Adequacy Ratio of Commercial Chinese Banks Stands at 11.03%

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The latest official data points to a modest rise in the core tier 1 capital adequacy ratio of Chinese commercial banks in 2018.

Figures released by the China Banking and Insurance Regulatory Commission (CBIRC) indicate that as of the end of 2018 the core tier 1 capital adequacy ratio of commercial lenders stood at 11.03%, for a rise of 0.28 percentage points compared to the end of the previous year.

The tier 1 capital adequacy ratio was 11.58%, for a rise of 0.24 percentage points, while the overall capital adequacy ratio was 14.20%, for an increase of 0.55 percentage points.

China’s commercial bank core tier 1 capital share is as high as 77 – 78%, for a comparatively high level of capital quality.

The Chinese central government is pushing for an expansion in channels for commercial banks to shore up their capital standing, recently allowing them to issue perpetual bonds as well as launching central bank bill swaps (CBS) to support the liquidity of the new instruments.

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