China plans to issue 500 billion yuan ($69 billion) in special sovereign bonds as it seeks to boost capital at its biggest banks to support the economic recovery, according to the government’s annual work report.The debt will be issued to replenish core tier-1 capital at big state-owned banks, beef up their operations and their capability to service the real economy, according to the report seen by Bloomberg News.
The plan to help out the banks, which are struggling with record low margins, was first flagged as far back as September. The government later said it would tap special sovereign bonds to fund the injections.
China is beefing up the strength of its banking system — even though the top six have capital levels that exceed requirements — after enacting a string of stimulus policies including cuts to mortgage rates and key policy rates. Enlisted to support the economy over the past few years, the lenders are battling record low margins, slowing profit growth and rising bad debt.China’s biggest banks include Industrial & Commercial Bank of China Ltd. and Agricultural Bank of China Ltd. among others.Authorities are looking to add at least 400 billion yuan of fresh capital into the first batch of three lenders by as soon as end-June, people familiar with the matter have said. The total injections could amount to as much as 1 trillion yuan for the largest lenders, Bloomberg News reported last year.First Published: Mar 5, 2025 7:48 AM IST
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