Since the first half of the year, under the background of banks increasing credit supply and rising non-performing rate, the growth rate of bank asset scale has accelerated and the capital consumption has increased. However, the capital growth of banks is difficult to keep pace with, and the profit has been affected, and the capital adequacy level at all levels has declined compared with last year.
According to the data, by the end of the third quarter of this year, the core tier one capital adequacy ratio of Chinas commercial banks was 10.44%, down 0.02 percentage points compared with the end of last quarter; the first tier capital adequacy ratio was 11.67%, up 0.07 percentage points compared with the end of last quarter; the capital adequacy ratio was 14.41%, up 0.20 percentage points compared with the end of last quarter.
At the beginning of the fourth quarter, banks accelerated the pace of capital replenishment. In October, the total issuance of bank secondary capital bonds and perpetual bonds was close to 70 billion yuan; in November, the total issuance of bank secondary capital bonds and perpetual bonds was close to 150 billion yuan, including more than 100 billion yuan of perpetual bonds.
The perpetual bond is a bright spot of bank capital replenishment this year. Since the successful issuance of the first bank perpetual bond in January 2019, the perpetual bond is becoming an important channel for banks to supplement tier one capital, and this year has accelerated the pace.
Wind information data shows that as of the end of November, 38 perpetual bonds have been issued by banks with a circulation of 598.5 billion yuan since the end of November. The main issuers include large commercial banks, joint-stock commercial banks, urban commercial banks, agricultural commercial banks, private banks and other commercial banks.
In addition, the Ministry of Finance recently said that in 2020, the National Peoples Congress approved the arrangement of a new special bond line of 3.75 trillion yuan. With the approval of the State Council, the new special bond line of 200 billion yuan has been issued on November 11 to support and resolve the risks of local small and medium-sized banks. At present, all the quotas have been issued in different regions.
At present, the capital shortage of commercial banks, on the one hand, is affected by the epidemic situation, the profit growth slows down, and the endogenous capital replenishment ability weakens; on the other hand, the regulatory requirements of capital become higher, and large banks need to meet the new TLAC (total loss absorption capacity) regulatory rules. In addition, under the new regulation of asset management, the transformation of wealth management business needs to consume more capital. The three effects are superimposed, and the capital gap of banks is enlarged. From the situation of listed banks disclosed at present, the profit growth margin of joint-stock banks has improved, and the urban and rural commercial banks are still under great pressure. These institutions urgently need to supplement capital and make the capital adequacy ratio return to a safer level. Industrial Research Senior Analyst Guo Yixin said.
Small and medium-sized banks are still under great pressure to replenish capital
There are two ways to replenish bank capital, one is endogenous accumulation, the other is external supplement. For small and medium-sized banks, the scale of endogenous supplementary capital is limited, and it is difficult to rely on external supplement.
According to the third-party platform data, by the end of the third quarter of this year, more than 70% of the 200 small and medium-sized banks with available data had a year-on-year decline in net profit. The CBRC also released regulatory indicators for the third quarter of 2020, which also showed that the cumulative net profit of commercial banks in the first three quarters was 1.5 trillion yuan, down 8.3% year-on-year.
A North China bank executive told reporters that in the third quarter of this year, the net profits of large state-owned banks and joint-stock banks declined year-on-year, but most of them increased forward-looking provisions, while small and medium-sized banks were not. In addition to being affected by the epidemic, small and medium-sized banks still have many problems left over from history, such as the difficulty in converting new and old kinetic energy, zombies of some local enterprises, and so on.
In this regard, Wu Xiaoling, former vice president of the central bank, once said that the examination and approval procedures for capital supplementary instruments such as secondary capital bonds and perpetual bonds should be simplified, the examination and approval time should be shortened, or whether more filing system could be adopted. We should study and reform the management system of financial bonds, simplify the approval procedures for issuing financial bonds, enhance the convenience of issuing financial bonds, and guide small and medium-sized banks to issue more long-term financial bonds.