Inner Mongolia has become the fifth province-level entity in China to issue special bonds to support the capital standing of its small and medium-sized banks (SMB).
Inner Mongolia issued a total of 8.5 billion yuan in 10-year special bonds to support SMB’s on 30 December, according to figures from Bond-China.com.
This included a 5.5 billion yuan issue to supplement the capital of Bank of Inner Mongolia (内蒙古银行), and a 3 billion yuan issue in support of Ordos Bank (鄂尔多斯银行).
Inner Mongolia authorities said that it had obtained a SMB special bond quota of 16.2 billion yuan, leaving it with another 7.7 billion yuan following the latest issue.
The move from the Inner Mongolian government follows special bonds issues by other provinces in China to support the capital standing of their own regional lenders, including Guangdong, Guangxi, Shanxi and Zhejiang.
China’s smaller regional banks have been a heightened source of concern for regulators ever since May 2019, which saw the start of a string of bank failures and takeovers beginning with Inner Mongolia’s Baoshang Bank.
Local Governments Issue $6.4 Billion in Capital Supplementation Special Bonds to Support Smaller Chinese Banks