Industrial and Commercial Bank of China and Agricultural Bank of China, both state-owned Chinese banks, announced capital strengthening plans totaling ¥260 billion. The government is expected to inject public funds through special government bonds, with the aim of enhancing lending capacity and resilience to risks amid a prolonged property downturn.
Industrial and Commercial Bank of China and Agricultural Bank of China, both state-owned Chinese banks, plan to raise up to ¥260 billion in total. The Ministry of Finance and tobacco-related state-owned enterprises will underwrite the offerings, while the government is reportedly planning to issue special government bonds to inject public funds.
The 2 banks are each expected to issue new shares worth up to ¥100 billion and ¥160 billion, respectively, with the Ministry of Finance contributing a total of ¥200 billion. The aim is to enhance their lending capacity and ability to respond to risks.
In addition, the Ministry of Finance will inject a total of ¥40 billion into policy-based financial institution Export-Import Bank of China and China Export & Credit Insurance Corporation, while 4 major insurance companies will raise a total of ¥60 billion. The capital increase across the 8 financial institutions is expected to reach as much as ¥360 billion.
The capital strengthening measures include contributions and capital injections not only from financial institutions but also from related sectors, putting the response to the property downturn and the use of public funds in focus.