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4w ago

China’s Top State-Owned Banks to Raise $72 Billion in Government-Backed Capital

The initiative seeks to bolster the financial system as Beijing confronts challenges like a property market downturn and slowing economic growth.

A sign of China Construction Bank is seen at a branch in Beijing, China, April 21, 2016. REUTERS/Kim Kyung-Hoon/File Photo
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A man walks past the entrance of a China Construction Bank branch in Chongqing, China, on December 29, 2024.
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Overview

  • Four major state-owned banks—China Construction Bank, Bank of China, Bank of Communications, and Postal Savings Bank of China—plan to raise 520 billion yuan through share sales to government-backed entities.
  • The Chinese Ministry of Finance will subscribe to shares from all four banks, while China Tobacco and China Mobile will participate in specific purchases.
  • The shares, denominated in yuan, will trade on the Shanghai Stock Exchange after a five-year lock-up period.
  • This recapitalization effort follows the National People’s Congress' approval of 500 billion yuan in special government bonds to support the banking sector.
  • The move is part of Beijing's broader strategy to stabilize its financial system, addressing challenges such as a prolonged property market slump and slowing economic growth.