The first half of 2022 has passed.
On June 27, a number of statistical data were released, showing that my country's economy as a whole is recovering.
As the "connector" between monetary policy and the market, in the past six months, the banking industry has made efforts in many fields to actively help companies out of difficulties.
For example, the banking industry continues to adjust its own profitability and reduce the cost of debt to further make room for the cost of loans to support the real economy; through the innovation of financial technology means, to bail out the real enterprises hit by the epidemic; banks develop consumer loans, combined with digital RMB Pilot projects to promote consumption recovery.
In addition, in the past six months, the development of the property market has faced challenges. Banks have also helped the property market return to its normal development track by reducing mortgage interest rates and supporting mergers and acquisitions of high-quality projects.
While escorting China's economic recovery, banks themselves are on the road to compliance and are constantly strengthening risk management and control.
In recent years, the financial regulatory authorities have continuously improved the risk management capabilities of banks, and raised the regulatory requirements for the capital of systemically important banks. At the same time, the channels for small and medium-sized banks to replenish capital have been expanded, so that the "safety pad" of banks has become stronger.
It is for this reason that this year, various banks have continued to replenish their capital by issuing bonds and other means to create better plans for maintaining operations.
Looking forward to the second half of the year, the effectiveness of the policy will continue to emerge, and the Chinese economy will recover steadily.
The banking industry will continue to shoulder the heavy responsibility of promoting economic development, and will continue to make efforts in stabilizing exports, investment, and consumption.
Shell Finance launched a series of reports on "The Bank's Half-Year Microscope", which looks at the "Bank's Half-Year" through several key words.
The regulatory requirements for capital adequacy ratio are becoming more and more strict, which makes the capital replenishment speed of banks continue to accelerate.
According to incomplete statistics from Shell Finance reporters, since the beginning of this year, large banks have raised a total of over 500 billion yuan through IPOs, allotments, convertible bonds, secondary capital bonds and perpetual bonds.
Among them, various banks issued nearly 380 billion yuan of secondary capital bonds and 156 billion yuan of perpetual bonds.
Zeng Gang, director of the Shanghai Finance and Development Laboratory, said that after the bank's capital replenishment, it will further enhance the bank's ability to resist risks, which will help strengthen the bank's ability to support and serve the real economy in the process of "stabilizing the economic market" in the second half of the year.
It is expected that the large-scale "blood replenishment" of banks will continue for a period of time in the future.
Tier 2 capital bond issuance scale hits record high
In the first half of this year, secondary capital bonds showed a blowout growth.
According to Industrial Research data, as of the end of June, commercial banks had issued a total of 380 billion yuan of secondary capital bonds, the highest in history.
In terms of issuance scale, the scale of Tier 2 capital bonds issued by state-owned banks such as ICBC and Postal Savings Bank in the first half of the year all exceeded 40 billion yuan.
Not only that, China Construction Bank was also allowed to issue no more than 120 billion yuan in tier 2 capital bonds in May.
In early June, the Agricultural Bank of China issued an announcement saying that the bank plans to issue write-down qualified tier-2 capital instruments of no more than 200 billion yuan in domestic and overseas markets.
Industry insiders believe that the main reason for banks to issue Tier 2 capital bonds to supplement capital is to further meet the higher regulatory capital adequacy ratio requirements while consolidating their own capital strength.
In October 2021, the list of my country's systemically important banks, the "Additional Supervision Regulations for Systemically Important Banks (Trial)" and the "Administrative Measures for the Total Loss Absorbing Capacity of Global Systemically Important Banks" were released successively. Rate regulatory requirements for higher requirements.
While the regulation has been further improved, the capital adequacy ratio of banks has declined.
According to the main regulatory indicator data of the banking industry in the first quarter of 2022 released by the China Banking and Insurance Regulatory Commission, at the end of the first quarter of this year, the capital adequacy ratio of commercial banks (excluding branches of foreign banks) was 15.02%, down 0.11 percentage points from the end of the previous quarter.
"Tier tier capital bonds are one of the more commonly used tools for commercial banks to supplement capital." Zhou Maohua, a macro researcher at the Financial Market Department of China Everbright Bank, said that the approval process for tier 2 capital bonds is relatively simple, and there are no hard and fast rules on whether banks are listed or not. At the same time, the issuance interest rate of secondary capital bonds is higher than that of ordinary financial bonds, which is also more favored by investors to a certain extent.
Perpetual bond issuance exceeds 100 billion
Perpetual bonds are also favored by banks.
According to statistics from China Bond Information Network, in the first half of this year, banks supplemented tier 1 capital by issuing perpetual bonds to 156 billion yuan.
However, this scale has decreased compared to last year.
According to statistics from China Bond Information Network, in the first half of 2021, a total of 25 commercial banks issued 30 perpetual bonds, with an issuance scale of over 300 billion yuan.
The research report released by Industrial Research pointed out that from the actual operation in the first half of the year, the downturn in valuation has a greater impact on the advancement of core-level capital tools, and the amount raised by various channels is at a low level in recent years.
Zhou Maohua said that the relative reduction in the scale of perpetual bond issuance may be related to the increase in capital replenishment tools in the first half of the year.
In addition, many other banks supplemented their capital through convertible bonds in the first half of this year.
Wind data shows that in the first half of this year, Changsha Bank planned to issue convertible bonds of no more than 11 billion yuan; Xiamen Bank and Ruifeng Bank both disclosed 5 billion yuan convertible bonds.
The convertible bonds issued by Industrial Bank, Bank of Chongqing and Bank of Chengdu have all been listed in the first half of this year, with the issuance scale of 50 billion yuan, 13 billion yuan and 8 billion yuan respectively.
It is expected that the follow-up bank diversification and replenishment of capital demand will still be relatively strong
According to data from the China Banking and Insurance Regulatory Commission, in the first quarter of this year, the capital adequacy ratio of large banks was 17.3%, significantly higher than that of other banks, and the capital adequacy ratio has generally maintained a relatively stable growth in recent years.
The capital adequacy ratios of joint-stock banks, city commercial banks and rural commercial banks were 13.6%, 12.8% and 12.3% respectively.
Zeng Gang said that in the first quarter of 2022, in addition to the general increase in the capital adequacy ratio of large commercial banks, the capital adequacy ratio of joint-stock banks, city commercial banks and rural commercial banks all decreased slightly.
Judging from historical data, the capital adequacy ratio of rural commercial banks has generally declined in recent years.
People in the industry generally believe that under the influence of factors such as increasing support for the real economy, accelerating the write-off of non-performing assets, replenishing internal pressures, and increasingly stringent regulatory requirements, commercial banks, especially small and medium-sized banks, still face certain pressures on their capital adequacy ratios.
In the next few years, with the confirmation of the list of domestic systemically important banks and the formal implementation of the total loss absorbing capacity (TLAC) of global systemically important banks, the capital pressures faced by the four major banks and key domestic banks will be further highlighted.
According to the "Administrative Measures for the Total Loss Absorbing Capacity of Global Systemically Important Banks" jointly issued by the People's Bank of China, the China Banking and Insurance Regulatory Commission and the Ministry of Finance in October last year, two standards have been set for the important banks of the global systemic banks, including the four major banks, namely, The risk-weighted ratio of my country's global systemically important banks should reach 16% in early 2025 and 18% in early 2028, and the leverage ratio should reach 6% in early 2025 and 6.75% in early 2028.
China Merchants Securities Liao Zhiming's team calculated that looking forward to 2022-2024, the net issuance demand of bank capital instruments and total external loss absorbing capacity (TLAC) bonds will be about 2.9 trillion yuan, and the average annual net issuance will be about 0.97 trillion yuan.
In addition, there are hundreds of billions of yuan to supplement the demand for core tier-one capital through convertible bonds, fixed increase, allotment, and IPO.
Zhou Maohua also said that from a trend perspective, due to the pressure of some banks to replenish capital and the promotion of credit liberalization, it is expected that the demand for diversified capital replenishment of subsequent banks will still be relatively strong.
In addition, some experts believe that capital replenishment channels still need to be continuously expanded.
Zeng Gang said that large banks have obvious advantages, but small and medium-sized banks have insufficient channels to supplement bank capital due to qualifications, market acceptance and investment activity.
He suggested that in the future, my country needs to further expand the space for small and medium-sized banks to supplement their capital by issuing secondary capital bonds, so as to create conditions for better development of small and medium-sized banks.
Beijing News Shell Finance reporter Wang Yuchen Jiang Fan