Chinese Banks Issue over 1 Trillion Yuan in Bonds to Shore up Capital Standing

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Commercial banks in China have sharply accelerated this issuance of bonds in the first half of 2022, as part of efforts to improve their capital adequacy ratios.

Data from Wind indicates that as of 21 June banks had made 240 billion yuan in bond issues since the start of the month, well ahead of the full month figure of 65.857 billion for May.

Since the start of the year Chinese banks have issued over 1 trillion yuan in bonds, also well ahead of the issuance figure for the same period last year.

Domestic analysts say the summer marks the peak season for efforts by Chinese banks to shore up their capital levels, while this impetus has been heightened by Beijing’s economic stabilisation measures in 2022, as well as a rise in credit demand.

As a consequence bank bond issuance is expected to be even more active in the second half of 2022.