New progress has been made in supplementing core tier one capital for state-owned banks. On March 30th, Bank of China, China Construction Bank, Postal Savings Bank of China, and Bank of Communications collectively issued a notice on the plan to issue A-shares to specific targets. It is reported that the Ministry of Finance will subscribe to all newly issued shares of Bank of China and Construction Bank in cash, and take over 90% of the newly issued shares of Bank of Communications and Postal Savings Bank, with a total investment scale of 500 billion yuan. Industry insiders say that with the continuous release of capital injection efficiency by state-owned banks, China's banking industry will inject financial vitality into the long-term high-quality development of the economy with stronger capital strength and better service quality and efficiency. Four state-owned banks announced plans for private placement. Bank of China announced plans to issue A-shares to the Ministry of Finance. The fundraising scale of this issuance shall not exceed RMB 165 billion (including the principal amount), and after deducting relevant issuance expenses, all funds will be used to increase the core tier one capital of Bank of China. The Ministry of Finance has signed a conditional share subscription agreement with the bank, intending to fully subscribe for the issued shares in cash. After obtaining approval from the China Securities Regulatory Commission for registration, the bank will issue at an appropriate time during the validity period. China Construction Bank announced that it plans to issue A-shares to the Ministry of Finance, with a total fundraising amount not exceeding RMB 105 billion (including the principal). After deducting relevant issuance expenses, all funds will be used to supplement the core tier one capital of China Construction Bank to support future business development. Postal Savings Bank announced that it plans to issue A-shares to the Ministry of Finance, China Mobile Communications Group Co., Ltd., and China Shipbuilding Group Co., Ltd., raising a total of RMB 130 billion. After deducting relevant issuance expenses, all funds will be used to supplement Postal Savings Bank's core tier one capital to support future business development. Among them, the Ministry of Finance plans to subscribe for a total amount of 117.57994 trillion yuan. Bank of Communications announced that the planned fundraising scale for the issuance of A-shares to specific targets will not exceed RMB 120 billion (including the principal amount), and after deducting relevant issuance expenses, all funds will be used to supplement Bank of Communications' core tier one capital. The issuing targets are the Ministry of Finance, China National Tobacco Corporation, and its wholly-owned subsidiary China Shuangwei Investment Co., Ltd. (hereinafter referred to as "China Tobacco" and "Shuangwei Investment"). Among them, the Ministry of Finance plans to subscribe for 112.42006 billion yuan, China Tobacco plans to subscribe for 4.57994 billion yuan, and Shuangwei Investment plans to subscribe for 3.00 billion yuan. Since September 2024, the State Administration of Financial Supervision and Administration and the Ministry of Finance have publicly stated for many times that the state will issue special treasury bond to support six large state-owned commercial banks to supplement core tier one capital, consolidate the ability of each bank to operate steadily and develop, and specifically implement in an orderly manner in accordance with the idea of "overall promotion, phased and batch, and one policy for each bank". This year's Government Work Report clearly mentioned that 500 billion yuan of special treasury bond will be issued to support large state-owned commercial banks to replenish capital. Capital is the "capital" for the continuous operation of commercial banks, and it is also the foundation for banks to promote the growth of the real economy, adjust the economic structure, and prevent various risks. According to the latest 2024 annual reports released by four major state-owned banks, as of the end of 2024, the core tier one capital adequacy ratios of Bank of China, Construction Bank, Postal Savings Bank of China, and Bank of Communications were 12.20%, 14.48%, 9.56%, and 10.24%, respectively, all of which have increased compared to the end of 2023. Bank of China mentioned in the announcement that supporting large state-owned commercial banks to further increase their core tier one capital through appropriate means is conducive to enhancing the banks' stable operational capabilities and customer service levels, increasing their efforts to serve the real economy, and providing stronger support for promoting sustained macroeconomic recovery and boosting market confidence. In order to support the high-quality development of the real economy, further enhance risk mitigation capabilities, optimize capital structure, orderly achieve TLAC (Total Loss Absorption Capacity of Global Systemically Important Banks) standards, consolidate long-term market competitiveness, and maintain balanced and coordinated key indicators, this bank has formulated this issuance plan Construction Bank stated in the announcement. Postal Savings Bank of China stated that this issuance, as an important component of the national package of incremental policies, has a policy effect of promoting high-quality economic development and maintaining financial security, demonstrating the country's firm confidence and strong support for China's banking industry. Bank of Communications announced that this issuance will further enrich the capital of Bank of Communications, enhance its capital adequacy ratio, strengthen its risk resistance ability, consolidate the capital foundation for sustainable development of various businesses, and provide strong support for Bank of Communications to better serve the real economy, respond to the constantly changing economic situation at home and abroad, and maintain its high-quality development in the future. By enhancing capital strength and optimizing capital structure, state-owned banks will better play their key role in high-quality economic development, providing strong support for the long-term stability and sustainable development of the Chinese economy Zeng Gang, Chief Expert and Director of Shanghai Finance and Development Laboratory, stated. (New Society)