China plans to inject at least 400 billion yuan ($ 55.13 billion) into its largest bank in the coming months as part of a wider stimulus package to revive economic growth, Bloomberg News reported on Wednesday.
The first batch of banks including Chinese Agricultural Bank 601288 (AGBANK) and Bank of Communications 601328 (Bocom), said Bloomberg, quoted unknown people who are familiar with this problem.
The plan, which can be completed immediately after the end of June, can change and the amount for each bank is still completed.
Ministry of Finance, Administration of National Financial Regulations, Agank and Bocom did not immediately reply to Reuters’ comments requests.
Chinese banks are being squeezed by slow credit requests and interest rates to support the growth of sputtering, along with many bad loans that are exacerbated by the crisis of the property sector for years.
The government promised at the end of last year to increase capital in the six major banks of the country, but did not provide many details.
The Capital Injection Plan aims to complete the Inti 1 Core Capital in the six largest state -owned banks in the country, including the China Industrial and Commercial Banks 601398, 601398, Agbank, China Bank 601988, 601988, China Construction Bank 601939, 601939, Bocom BOK and Postal Savings Bank of China 60166888. 601939. 601939.
In total, China can increase 1 trillion yuan through treasury bonds specifically for capital injection to the banks of major countries, Reuters reported in October.
Agank closed up 2.62% in Hong Kong, and Bocom ended 2.15% higher.
Supporting groups that have a combined market value of $ 1 trillion, in what will be the first time the authorities have rearranged Chinese banks since the global financial crisis, is an important part of the Beijing stimulus effort.
Last October, China promised to “significantly increase the” debt to revive the economy, including steps that would help local governments overcome their debt problems, offer subsidies to people with low incomes, supporting the property market and re -filling the capital of the state bank, among other steps.
China also launched a 10 trillion Yuan debt package to facilitate the strain of local government financing and stabilize economic growth.
The Chinese parliament, the National People’s Congress (NPC), will start its annual session on March 5. Markets and economists supervise more stimulus steps that will be launched during the session, expecting the steps targeted to increase consumption.
Chinese lenders have struggled with the fall of net interest margin (NIM) and shrinking profits. The overall NIM for Chinese commercial banks descended to the lowest record of 1.52% in the fourth quarter of last year, official data showed.
Source: Reuters
