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.
On November 16, the Bank of Jiangsu announced that the application for A-share allotment scheme was approved by the CSRC, which became the first approval for the banks share allotment financing in recent seven years. According to the prospectus, Bank of Jiangsu plans to issue 3.463 billion new shares to shareholders of a shares registered on the date of equity registration at a ratio of 3 shares for every 10 shares, with a financing scale of no more than 20 billion yuan.
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.
Small and medium-sized banks are still under great pressure to replenish capital
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 bank analyst said that in terms of external replenishment, whether it is core tier 1 capital, other tier 1 capital or tier 2 capital, most small and medium-sized banks are still difficult to be supplemented because of the lack of supplementary channels, low market recognition of small banks and slow approval.
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.
In addition, shareholder capital increase is still the primary channel for small and medium-sized banks to supplement core tier one capital. It is suggested that small and medium-sized banks should actively promote private placement, introduce strategic investors, deepen the mixed reform, and explore the possibility of foreign investment. We should relax the conditions for shareholders of small and medium-sized financial institutions and expand the types of shareholders, such as attracting private equity funds to invest in small and medium-sized banks. At the same time, it is also necessary to strengthen supervision and control to prevent the unqualified qualification of shareholders and the tunneling of commercial banks by shareholders Wu Xiaoling said.