- Analysts urge swift recapitalization of major Chinese banks to bolster lending, revive slowing growth, and manage asset quality strains.
- China has set its 2024 economic growth target at approximately 5%, unchanged from last year, as the government allocates additional fiscal resources to counter deflationary pressures and mitigate the impact of US tariffs.
Four of China’s largest state-owned banks announced Sunday plans to raise a combined $71.6 billion from investors, including the Ministry of Finance, through private placements. The move follows Beijing’s pledge to support the economy by strengthening the banking sector.
The fundraising aims to increase banks’ core Tier 1 capital, reinforcing their ability to stimulate the real economy. Earlier this month, Chinese authorities committed to recapitalizing major state-owned banks, and following Sunday’s announcement, shares in these institutions rose on Monday.
The Bank of China plans to raise approximately $22.7 billion, while the China Construction Bank intends to secure up to $14.4 billion, according to documents released Sunday.
Analysts urge swift recapitalization of major Chinese banks to bolster lending, revive slowing growth, and manage asset quality strains.
The profitability of Chinese banks, already under pressure from economic slowdown and a prolonged housing market crisis, is expected to decline further due to potential key interest rate cuts this year.
China has set its 2024 economic growth target at approximately 5%, unchanged from last year, as the government allocates additional fiscal resources to counter deflationary pressures and mitigate the impact of US tariffs.