In the past April, commercial banks issued bonds of 2015 billion yuan, an increase of 193.52% month on month. Perpetual bonds and secondary capital bonds continue to be favored by commercial banks, and the issuance of these two types of bonds accounts for more than half.
Surging news according to the issuance announcement statistics disclosed by China bond information network, there were 15 bond issuing banks in April, and the issuance scale of commercial bank bonds was 2015 billion yuan, including 54 billion yuan of perpetual bonds and 50.5 billion yuan of secondary capital bonds.
With regard to the capital replenishment of commercial banks, the 2021 Bank Of China Limited(601988) industry development report issued by the China Banking Association pointed out that with the support of regulatory policies, perpetual bonds have become the preferred tool for other tier 1 capital replenishment of commercial banks, and the issuance scale of tier 2 capital instrument bonds has also continued to remain high.
Issuance of bonds by commercial banks in April
Specifically, three banks issued perpetual bonds in April, totaling 54 billion yuan: Bank Of China Limited(601988) 50 billion yuan, Fudian bank 2 billion yuan and Chongqing rural commercial bank 2 billion yuan.
Two banks issued secondary capital bonds totaling 50.5 billion yuan: China Industrial And Commercial Bank Of China Limited(601398) 50 billion yuan and Chengde bank 500 million yuan.
Four banks issued special financial bonds for small and micro enterprise loans, totaling 19.5 billion yuan: China Zheshang Bank Co.Ltd(601916) 10 billion yuan, Xiamen International Bank 5 billion yuan, Tianjin Rural Commercial Bank 2 billion yuan and Shaoxing bank 2.5 billion yuan.
There are two banks issuing green financial bonds with a total of 6 billion yuan: Chengdu rural commercial bank with 3 billion yuan and Guangdong rural commercial bank with 3 billion yuan.
In addition, Industrial Bank Co.Ltd(601166) , China China Minsheng Banking Corp.Ltd(600016) , Hua Xia Bank Co.Limited(600015) , China Citic Bank Corporation Limited(601998) issued financial bonds of 11.5 billion yuan, 20 billion yuan, 10 billion yuan and 30 billion yuan respectively.
Perpetual bonds and secondary capital bonds were the main types of bonds issued by commercial banks in April. Perpetual bonds and secondary capital bonds are common bank capital replenishment tools in recent years. Perpetual bonds refer to bonds without a clear maturity date or with a very long term, that is, they exist permanently in theory and are used to supplement other tier 1 capital of banks. Secondary capital, also known as subsidiary capital or supplementary capital, is other capital components in the capital base of commercial banks excluding core capital. It is an index reflecting the capital adequacy of banks.
With regard to bank capital supplement, the report released by PwC in April this year shows that since 2021, large commercial banks and joint-stock commercial banks have continued to supplement the bank’s tier 1 and tier 2 capital by issuing perpetual bonds and tier 2 capital bonds. In 2021, the number of listed urban and rural commercial banks using external channels to supplement capital increased significantly compared with previous years, and the ways of capital supplement were more diverse. From the public data, urban commercial banks mainly use sustainable bonds and secondary capital bonds to alleviate the capital pressure. However, affected by market conditions, issuance qualification, capital planning and the urgency of replenishing primary capital, some urban commercial banks also alleviate capital pressure through non-public issuance.
