On March 16th, the Party Committee of the State Administration for Financial Regulation held an expanded meeting. The meeting emphasized the promotion of large state-owned commercial banks to supplement capital and the study of diversified capital supplementation for small and medium-sized financial institutions. Following the issuance of 500 billion yuan of special treasury bond to inject capital into four major state-owned banks in 2025, another 300 billion yuan of special treasury bond will be issued in 2026 to support major state-owned banks to replenish capital. In terms of small and medium-sized banks, the reporter found through reviewing recent capital replenishment cases that endogenous "blood supplementation" relies on profit retention to solidify capital strength and weaken momentum, while most of them are exogenous "blood supplementation", involving market-oriented tools such as targeted issuance, convertible bond to equity swaps, issuance of secondary capital bonds, perpetual bonds, etc. Industry insiders suggest exploring more market-oriented ways to participate in bank capital replenishment in the future, issuing special bonds to establish a long-term mechanism for capital replenishment of small and medium-sized banks, and further enhancing the risk resistance, asset allocation, and service capabilities of the banking industry to the real economy. A new round of special treasury bond capital injection "on the road" This year's government work report made it clear that 300 billion yuan of special treasury bond would be issued to support large state-owned commercial banks to replenish capital. Following the injection of 500 billion yuan of special treasury bond into four major state-owned banks in 2025, the second batch of capital injection arrangements for major state-owned banks has been "on the way". As the first four state-owned banks to receive capital injections among the six major banks, Bank of China, Postal Savings Bank of China, Bank of Communications, and Construction Bank will raise a total of 520 billion yuan in private placements by 2025, with the Ministry of Finance contributing 500 billion yuan. Industry insiders predict that under the policy idea of "installment and batch, one bank, one policy", ICBC and Agricultural Bank of China, which had not received capital injection last year, will be concerned by the industry, and the proposed 300 billion yuan special treasury bond will mainly inject capital into these two banks. The six major banks are all systemically important banks in China, among which Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, and Bank of Communications are globally systemically important banks. This means that these banks need to comply with higher regulatory standards and therefore face higher capital adequacy requirements. At the same time as the capital replenishment of state-owned large banks is launched, the "blood replenishing" actions of small and medium-sized banks are also being carried out intensively. According to the announcement of Chengdu Bank, the Sichuan Financial Regulatory Bureau recently approved the increase of the bank's registered capital from 3.736 billion yuan to 4.238 billion yuan. The convertible bonds of the bank will be redeemed and delisted in advance in 2025, increasing the total number of shares of the bank to 4.238 billion. According to industry insiders, redeeming convertible bonds is an effective way for listed banks to supplement their capital. After the conversion, the equity portion of the bank's capital structure increases and the debt decreases, thereby improving the core tier one capital adequacy ratio. The capital replenishment of non listed banks is also non-stop. Since the beginning of this year, the capital increase of many city commercial banks, rural commercial banks, and village banks has been approved by regulatory authorities. For example, the Jining Financial Supervision Bureau recently approved the increase of registered capital by approximately 18 million yuan for Shandong Jiaxiang Rural Commercial Bank and over 9 million yuan for Shandong Yutai Rural Commercial Bank. Hubei Bank recently completed a private placement of 1.8 billion shares, raising 7.614 billion yuan, all of which will be used to supplement core tier one capital. At the same time, bond financing is also actively promoted, with the main types of instruments being secondary capital bonds and indefinite term capital bonds, also known as perpetual bonds. Recently, Dongguan Rural Commercial Bank and Qingdao Bank were approved to issue capital instruments not exceeding 6 billion yuan each. There is a strong demand for bank capital replenishment. "The special capital injection of treasury bond can alleviate the endogenous capital replenishment pressure caused by the narrowing of the net interest margin and the slowing of profitability of large state-owned banks, and improve the capital adequacy ratio and anti risk ability. ”Zeng Gang, deputy director of the National Finance and Development Laboratory, said that, in particular, treasury bond capital injection can also enhance the credit supply capacity of large state-owned banks. According to the leverage effect, trillions of yuan of credit can be leveraged to better support the real economy and stable growth; In addition, it helps to solidify the financial "ballast stone". The relevant person in charge of United Credit Ratings stated that capital supplementation will significantly enhance the credit lending capabilities of state-owned banks. In the current critical stage of economic transformation, capital supplementation of state-owned banks can provide stronger financial support for national strategic support areas. In the recent capital increase of small and medium-sized banks, local state-owned assets have actively entered the market. Industry insiders analyze that this has laid a solid foundation for the business expansion and risk resistance of small and medium-sized banks. It not only helps banks quickly replenish capital, but also brings implicit credit endorsement and regional resource synergy effects, which is conducive to enhancing the equity concentration of local small and medium-sized banks, regulating operations, improving corporate governance, and more smoothly guiding bank credit to local infrastructure, key industries, inclusive, rural revitalization and other fields, making finance and regional development resonate with each other. Industry insiders also suggest exploring more market-oriented methods and long-term mechanisms to participate in bank capital replenishment in the future, further enhancing the high-quality development level of the banking industry. (New Society)