playtheroulette| The State Administration of Financial Supervision has approved that the issuance of capital instruments by three banks has exceeded 500 billion yuan this year

21st Century Economic report reporter Li Wang reporting from Beijing

Secondary capital debt and perpetual debt are commonly used in commercial banks.PlaytherouletteExogenous capital replenishment tools can supplement second-tier capital and other first-tier capital respectively.

Under the background of capital consumption pressure and maturity sequel, since the beginning of this year, commercial banks have increased the issuance of secondary capital bonds and perpetual bonds, and some commercial banks have applied to the regulatory authorities for new issuance quotas again after the completion of quota consumption.

The approval applications for capital instruments of three banks were published on the website of the General Administration of Financial Supervision on May 20, including 80 billion yuan of perpetual debt of Huaxia Bank. Guangzhou Agricultural Commercial Bank and Nanhai Agricultural Commercial Bank have capital instruments of no more than 12 billion yuan and 3 billion yuan respectively (including secondary capital debt and perpetual debt). Among them, Guangzhou Agricultural and Commercial Bank of China took the lead in issuing its sustainable bonds on May 21, with a base size of 8 billion yuan, with a maximum of 12 billion yuan.

According to the statistics of the 21st Century Economic report, since the beginning of this year, the General Administration of Financial Supervision system has approved the capital instruments of 12 banks totaling no more than 581.5 billion yuan, and because of the large volume, the capital instruments of large banks and joint-stock banks account for a relatively high proportion.

Generally speaking, the capital pressure of commercial banks mainly comes from two aspects, one is the capital consumption caused by scale expansion, and the other is the maturity redemption of issued capital instruments. Against this background, as of May 20 this year, commercial banks have issued a total of 31 secondary capital bonds and perpetual bonds, with a scale of more than 500 billion yuan, more than double that of the same period last year. Up to now, the balance of secondary capital debt has exceeded 4 trillion yuan, and the scale of permanent debt is close to 2. 5 trillion yuan.Playtheroulette.5 trillion yuan.

"in the context of the current economic recovery and strengthening to serve the real economy, the sustained growth of bank credit has intensified the capital consumption of banks, and commercial banks need to expand capital to support the increase of credit. Small and medium-sized banks face more challenges in terms of capital replenishment, in which the issuance of two permanent bonds or a relatively easy way to achieve, government special bonds can also form a certain supplement. " Du Jian, a fixed income analyst at Zheshang Securities, said.

Judging from the above-mentioned types of banks issuing secondary capital bonds and perpetual bonds, there are not only large banks and joint-stock banks, but also small and medium-sized banks such as city commercial banks and agricultural commercial banks. Among the big banks and joint-stock banks, there are Agricultural Bank, Construction Bank, Bank of China, Bank of Communications, Minsheng Bank, CITIC Bank, Industrial Bank, Bohai Bank and so on. City Commercial Bank and Agricultural Commercial Bank include Ningbo Bank, Chang'an Bank, Dongguan Bank, Guilin Bank, Jiangsu Dongtai Agricultural Bank and so on.

Take the Agricultural Bank of China, which issued secondary capital bonds and perpetual bonds at the same time this year as an example. On April 24, the bank successfully issued the second tranche of secondary capital bonds totaling 60 billion yuan. The bank just redeemed 40 billion yuan of secondary capital bonds on April 11, and the same operation took place in the first quarter of this year. On March 13, the bank successfully issued the first tranche of 40 billion yuan of perpetual bonds this year, and in August and September this year, two tranches of perpetual bonds are due to be redeemed.

It is worth mentioning that due to the relatively short issuance time of perpetual bonds, which began to be issued in 2019, the perpetual bonds of many banks also matured for the first time this year. At present, the Bank of China has taken the lead in redeeming its first perpetual debt in full. Minsheng Bank has announced that it will redeem its first tranche of perpetual bonds in full, and 14 issues of perpetual bonds of 13 banks are due to expire this year, including Huaxia Bank, which has just been approved a quota of 80 billion yuan.

Different from big banks and joint-stock banks, urban commercial banks and agricultural commercial banks face relatively greater capital pressure. According to the General Administration of Financial Supervision, by the end of 2023, the capital adequacy ratios of large banks, joint-stock banks, urban commercial banks and agricultural commercial banks were 17.56%, 13.43%, 12.63% and 12.22%, respectively.

Take Guangzhou Agricultural and Commercial Bank as an example, by the end of 2023, the bank's capital adequacy ratio, tier one capital ratio and core tier one capital ratio were 13.67%, 11.12% and 9.83% respectively. It will increase the bank's tier one capital adequacy ratio by more than 1.5 percentage points (assuming that the actual amount raised is 12 billion yuan). This is also the first time that the bank has issued perpetual bonds. At present, the bank's other tier one capital is mainly contributed by preferred shares.

Taking Nanhai Agricultural and Commercial Bank as an example, the financial report shows that by the end of 2023, the bank's capital adequacy ratio, tier one capital adequacy ratio and core tier one capital adequacy ratio were 14.03%, 12.88% and 12.88% respectively, and the difference between Tier 1 capital adequacy ratio and core Tier 1 capital adequacy ratio was 0, indicating that it is necessary for the bank to issue sustainable bonds.

The Review and Future Prospect of China's listed Banks in 2023 released by Ernst & Young shows that listed banks actively replenish capital through internal and external channels in 2023, and the level of capital adequacy remains stable. By the end of 2023, the core tier one capital adequacy ratio of all listed banks was 10.99%, down 0.08 percentage points from the end of 2022; the tier one capital adequacy ratio was 12.66%, down 0.11 percentage points from the end of 2022; and the capital adequacy ratio was 15.80%, the same as at the end of 2022. Compared with the same period of the whole year, the average capital adequacy level of various types of listed banks has diverged, while the capital adequacy ratio of large banks and national joint-stock banks has decreased, while that of City Commercial Bank and Agricultural Commercial Bank has increased.