Three Chinese banks including a major state-owned lender have just held concurrent bond issues to improve their capital standing.
On 17 March Bank of China, Bank of Taizhou and Haiyan Rural Commercial Bank all held bond issues to raise funds to supplement their tier-2 capital.
Big state-owned lender Bank of China issued 25 billion yuan in tier-2 capital bonds, including a 15 billion yuan in 10 year fixed-rate instruments and 10 billion yuan in 15 year fixed-rate instruments.
Bank of Taizhou raised 2 billion yuan via its bond issue, while Haiyan Rural Commercial Bank’s issue raised 200 million yuan.
All three of the banks said that the funds raised would be used to supplement their tier-2 capital, increase their capital adequacy ratios and improve their risk-resistance capability.
Nine Chinese banks have held tier-2 capital bond issues since the start of 2021, raising 69.81 billion yuan in total.
Dong Ximiao (董希淼), chief researcher with MUCFC, said to Securities Daily that the capital adequacy levels of China’s commercial banks remain strong overall, and in general satisfy regulatory requirements.
Some small and medium-sized banks in China continue to face considerable capital pressure however, due to operations growth and expansions in scale.