CCTV News: On March 30, Bank of China, Construction Bank, Bank of Communications, and Postal Savings Bank of China issued announcements announcing that it plans to raise funds from specific targets to supplement the bank's core tier 1 capital.
According to the announcements of each bank: Bank of China plans to issue A-shares to specific targets, which will be subscribed by the Ministry of Finance in cash, and the scale of funds raised will not exceed 165 billion yuan. China Construction Bank plans to introduce strategic investment from the Ministry of Finance, with the total amount of funds raised no more than 105 billion yuan. The Bank of Communications plans to raise a total of 120 billion yuan, and the issuance targets are the Ministry of Finance and China Tobacco. Postal Savings Bank of China plans to issue A-shares to the Ministry of Finance, China Mobile Group and China Shipbuilding Corporation, with a total amount of funds raised to 130 billion yuan.
The funds raised by each bank will be used to supplement core tier 1 capital after deducting the relevant issuance fees. Core level 1 capital is the key driver for commercial banks to serve the real economy and promote their own high-quality development.
Zhou Quan, general manager of the Assets and Liabilities Department of Bank of China, said: "This capital replenishment will help large state-owned commercial banks further consolidate their capital strength, optimize their capital structure, improve their stable operating capabilities and risk prevention capabilities, and better play the role of the 'main force' serving the real economy and the 'ballast stone' for maintaining financial stability."
Chen Huang, general manager of the Financial Management Department of the Head Office of the Bank of Communications, said: "Supporting large state-owned commercial banks to supplement core tier 1 capital is an important part of the national incremental policy. It will effectively ensure the smooth operation of the financial system and strongly support large state-owned banks to play a greater role in serving economic transformation and development."
Finance Lao Wang: What impact does banks supplement capital have on us?
Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China issued announcements on the 30th, intending to issue new shares to the Ministry of Finance and other departments through targeted additional issuances, with a total supplementary capital of no more than 520 billion yuan. Why do these four banks need to supplement their capital? What impact will it have on us? Let’s take a look at the interpretation of Lao Wang of Finance - CCTV reporter Wang Lei.
These four banks are all large commercial banks. If you walk a few hundred meters on the commercial streets of any city, you will definitely find their traces. Why do they need to supplement their capital? Is the bank short of money? Lao Wang checked the operating conditions of these banks as soon as possible, but it was not.
First of all, the latest core Tier 1 capital adequacy ratios of these four banks are significantly higher than regulatory requirements, and there is no risk of insufficient capital adequacy ratios at present. There is also the latest data. The total net profits of these four banks exceeded 750 billion yuan last year, so they are not short of money and do not have operating risks. So, why do they need to issue new shares to supplement their capital?
Most people understand that as long as banks absorb enough deposits, they can issue corresponding loans. However, in order to ensure the security of deposits of depositors, the financial regulatory authorities also require banks to have sufficient proportion of capital, and the core Tier 1 capital adequacy ratio mentioned just now is an important indicator. Simply put, the higher the capital adequacy ratio of a bank, the safer the bank will be and more loans can be issued. However, in recent years, banks' loan interest rates have dropped significantly. While increasing efforts to support the real economy, banks' net interest margins and profit growth rates have also declined, and their ability to replenish capital through their own profits has also declined. Therefore, in the incremental policy announced in September last year, the Ministry of Finance announced that it would issue special treasury bonds to support the six major commercial banks in replenishing capital. During this year's Two Sessions, it was also clarified that the issuance scale of this part of special treasury bonds is 500 billion yuan.
It is said that banks are operating risks, and large commercial banks are even more of the "ballast stone" in the financial system, playing an indispensable role in supporting and serving the real economy. Now, we will supplement them with capital in advance to enhance the future loan allocation capabilities of these banks and enable our enterprises and individuals to receive more financial support; at the same time, we will further enhance the risk resistance of banks. With the mutual support and cooperation between fiscal and financial policies, the ability of finance to serve the real economy will be further enhanced, our economy will develop better, and everyone's living standards will rise and get better and better.
