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2025-03-06 12:14:37 During China’s National People’s Congress session, the authorities planned to issue RMB500 billion in central government special bonds (CGSB) this year to support the capital restructuring of major banks, Citigroup released a research report stating. The broker anticipated that these funds will be utilized to recapitalize the first batch of banks with relatively weaker capital positions, including BANKCOMM (03328.HK), PSBC (01658.HK), and BANK OF CHINA (03988.HK). An additional RMB500 billion is expected to be raised next year to restructure ABC (01288.HK), ICBC (01398.HK), and CCB (00939.HK). The broker assumed this capital restructuring will be executed through the Ministry of Finance (MOF) issuing additional A-shares. While it was initially expected that RMB1 trillion in capital would be allocated based on the asset size of the six major banks, the first batch now appears to receive only half of that amount. This suggests that authorities are prioritizing banks with relatively weaker capital conditions. Consequently, the CET1 ratio uplift for the first batch of selected banks will top expectations, though the dilution effect will also be stronger than anticipated. For the second batch of banks receiving the remaining RMB500 billion, the degree of equity dilution will be lower than expected, which is favorable to them. ~ AAStocks Financial News Web Site: www.aastocks.com | |