**Times reporter Xie Zhongxiang.
On December 12 and 13, Guangxi and Shandong will be listed and traded on the Shenzhen Stock Exchange respectively for special bonds to support the development of small and medium-sized banks. The implementation of these special bonds means that a number of small and medium-sized banks in Shandong and Guangxi will benefit from capital replenishment. Industry insiders said that replenishing capital is an important means to enhance risk resistance, which will help small and medium-sized banks prevent and resolve financial risks.
As an exogenous capital supplement tool, the issuance pace of special bonds of small and medium-sized banks has accelerated significantly since 2023, and the scale has significantly exceeded that of the same period in 2022. According to the statistics of the **Times reporter, as of yesterday, 16 regions, including Liaoning, Heilongjiang, Inner Mongolia, Shandong, etc., will complete the issuance of 19 special bonds of small and medium-sized banks in 2023, with a total scale of 2082800 million yuan, exceeding 63 billion yuan in the same period last year, a record high.
A number of banks in Shandong and Guangxi have benefited.
Yesterday, the official website of the Shenzhen Stock Exchange disclosed that the 2023 Shandong Province ** Special Bond to Support the Development of Small and Medium-sized Banks (Phase I) has been issued and will be listed and traded on the Shenzhen Stock Exchange from December 13. The bond is a 10-year fixed-rate interest-bearing bond, with a total issuance amount of 25 billion yuan and a coupon rate of 292%。
A few days ago, according to the relevant documents disclosed by the Shandong Provincial Department of Finance, the 25 billion yuan of special bonds for small and medium-sized banks, after raising funds, will be mainly used to support the capital supplement of 84 urban rural commercial banks in the province, such as Laishang Bank, Yantai Bank, Jinan Rural Commercial Bank, Dongying Rural Commercial Bank, etc., mainly to supplement other tier 1 capital.
In addition to Shandong, Guangxi has also recently completed the issuance of special bonds for small and medium-sized banks. The Shenzhen Stock Exchange disclosed on December 8 that the scale was 27The 800 million yuan Guangxi special bond to support the development of small and medium-sized banks will be listed and traded from December 12. According to documents previously disclosed by the local Department of Finance, the bonds issued this time are used to inject capital into the new institutions established by the Guangxi Rural Credit Cooperatives Union (hereinafter referred to as the "Guangxi Rural Credit Cooperatives") after the reform to support its capital replenishment.
In January this year, the Guangxi Rural Credit Union held a meeting and decided to restructure and establish the Guangxi Rural Commercial United Bank on the basis of the Guangxi Rural Credit Union, and the original creditor's rights and debts will be undertaken by the newly established Guangxi Rural Commercial United Bank, and the preparation and opening of the new institution are still to be approved by the regulatory authorities.
The issuance scale reached a new high.
Since 2023, the pace of special bond issuance by small and medium-sized banks in China has increased significantly. According to the data of China Bond Information Network, the reporter found that 16 places such as Liaoning, Heilongjiang, Guangxi, Anhui, Ningxia, Shaanxi, and Inner Mongolia have successively issued relevant bonds this year. As of yesterday, the issuance scale has reached 2082$800 million, an increase of about 230% over the full year of 2022.
Wind data shows that since 2020, a total of 22 provinces (including autonomous regions) have issued a total of more than 460 billion yuan of special bonds for small and medium-sized banks to supplement capital. Among them, Liaoning, Inner Mongolia, Henan, Heilongjiang and other northern provinces and regions have issued more special bonds of small and medium-sized banks in the past two years, and the scale and pace of issuance in these regions are closely related to the regional economy.
Compared with large state-owned banks and joint-stock banks, the operation of a large number of regional small and medium-sized banks is more differentiated, and their profitability is not ideal. In terms of indicators such as non-performing loan ratio and capital adequacy ratio, the relevant level of these small and medium-sized banks is lower than that of the industry. The pressure on capital replenishment of non-listed small and medium-sized banks is relatively high, so it is common to supplement capital through the issuance of secondary capital bonds and local ** special bonds.
From the perspective of issuance quota, the follow-up quota to support the development of special bonds for small and medium-sized banks remains sufficient. At the end of February this year, the "Report on the Implementation of China's Monetary Policy in the Fourth Quarter of 2022" released by the central bank showed that in 2020 and 2022, 550 billion yuan of local ** special bonds will be added, which will be used to supplement the capital of small and medium-sized banks.
Cinda ** related research reports believe that combined with the Xi inertia of supporting small and medium-sized banks to develop special bonds, it will be left to the end of the next year, and there may be new quotas issued in future years, so the remaining quota is only temporary, and it may be more and more in the future.
The new capital rules will be implemented soon.
Another reason for the strong demand for small and medium-sized banks to replenish their capital through special bonds may be due to regulatory requirements. The Measures for the Capital Management of Commercial Banks, issued by the State Administration of Financial Supervision in November this year, will come into force on January 1, 2024.
In June this year, the research report released by the team of Ming Ming, chief economist of CITIC** (600030), predicted that, on the whole, after the official implementation of the new capital regulations, due to stricter risk management and capital requirements, the competitiveness of small and medium-sized banks will decline, the living space will be compressed to a certain extent, and the overall capital replenishment pressure will be further increased.
The Ming Ming team said that the introduction of local ** special bonds provides a way for small and medium-sized banks to replenish their capital, which will help them stabilize their capital structure and improve their operating capabilities. In addition, it will also help maintain the stability of the entire financial system, provide financing services for more local small and medium-sized enterprises, and help local economic development and debt resolution.
In October this year, the relevant person in charge of the State Administration of Financial Supervision once again mentioned "steadily promoting the reform of small and medium-sized financial institutions" at the press conference on data information of the banking and insurance industry in the third quarter, adhered to the principle of classified guidance and "one province, one policy", and promoted the local party committee to formulate and implement the reform and risk reduction plan for small and medium-sized financial institutions.
In 2023, many provinces and municipalities mentioned the risk reduction and capital replenishment plans of small and medium-sized banks in their budget reports. Among them, Shanxi Province said that on the basis of strengthening the verification of assets and funds, and the review of accountability, it will steadily promote special bonds to supplement the capital of small and medium-sized banks. Liaoning Province pointed out that it is necessary to make good use of special bonds and special loans, support the reform of rural credit institutions and urban commercial banks, and encourage cities to complete the task of clearing and disposing of non-performing assets of small and medium-sized banks.
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