One of China’s big state-owned banks plans a new bond issue to shore up its capital adequacy ratios.
The Postal Savings Bank of China (PSBC) release the prospectus for its first tier-2 capital bond issue for 2022 on 1 March.
The issue, which is scheduled for 4 March, will raise 40 billion yuan via tier-2 capital bonds, including 35 billion yuan in 10 year bonds and 5 billion yuan via 15 year bonds.
China Chengxin Credit Rating Group has given PSBC a long-term credit rating of AAA, and the planned tier-2 capital bonds a rating of AAA.
PSBC obtained approval from China’s banking regulator for the issuance tier-2 capital bonds in July 2021, followed by approval in August from the Chinese central bank for a tier-2 capital bond issuance quota of up to 150 billion yuan.
PSBC also issued 60 billion yuan in tier-2 capital bonds in August, leading to a sizeable rise in its capital adequacy ratios for the end of the third quarter.
As of the end of September 2021 PSBC’s capital adequacy ratio was 15.48%, as compared to 13.88% at the end of 2020. The bank’s total assets were 12.221662 trillion yuan, while its non-performing loan ratio was 0.82% and its provisions coverage ratio was 422.70%.