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E-mail China.org.cn, November 25, 2024
Shou Xiaoli:
Please continue to ask questions. I see many more hands raised, but due to time constraints, we will take the last two questions.
CCTV:
As we just heard, Mr. Lan mentioned the plan to issue special treasury bonds to supplement the core Tier 1 capital of large state-owned commercial banks. Could you please explain the specific policy considerations behind this decision, and how will it be implemented going forward? Thank you.
Lan Fo'an:
I'd like to invite Mr. Liao to answer your questions.
Liao Min:
Thank you for your questions. Large state-owned commercial banks act as the main force to serve the real economy and the ballast to ensure financial stability. Currently, the six large state-owned commercial banks — Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China — are operating steadily overall, with stable asset quality and sufficient provisions. Their key indicators are all within a "healthy range" according to international best practices. Notably, owners' equity has continued to grow, reaching 15.1 trillion yuan by the end of June 2024, a 2.9% increase from the beginning of the year. Capital strength is relatively robust, with an average core Tier 1 capital adequacy ratio of 12.3% as of the end of June 2024.
Large state-owned commercial banks, along with other financial institutions, bear the critical responsibility of supporting high-quality economic development and implementing key tasks concerning technology finance, green finance, inclusive finance, pension finance, and digital finance. Capital is the lifeblood of commercial banks' sustainable operations and is fundamental to promoting the growth of the real economy, facilitating economic restructuring, and guarding against various risks. As we know, in recent years, some small and medium-sized local banks have replenished their capital. Under current circumstances, we believe it's necessary to support large state-owned commercial banks in further increasing their core Tier 1 capital through appropriate channels. This will not only improve banks' capacity for prudent management but also amplify the leverage effect of capital, boosting lending capacity and enabling greater support to the real economy. This will offer stronger backing for the sustained recovery of the macroeconomy and help bolster market confidence.
Authorized by the State Council, the MOF is responsible for the unified performance of the function of state-owned financial capital investors, which includes establishing mechanisms for capital replenishment and dynamic adjustment for state-owned financial institutions. The MOF, adhering to the principles of marketization and the rule of law as well as the approach of "coordinated advancement, phased implementation and tailored strategies," will actively raise funds through channels, such as issuing special treasury bonds, to prudently and orderly support large state-owned commercial banks in further increasing their core tier-1 capital. We believe that through this initiative, the operating and profit-making capabilities of large state-owned commercial banks will be enhanced, thereby promoting the steady and sustained development of the entire national economy.
I'd like to inform you all of the most recent developments: the initiative has been launched. The MOF, in conjunction with relevant financial regulatory authorities, has established an inter-departmental working mechanism to efficiently assist large state-owned commercial banks in expediting the completion of related tasks. We are now awaiting the submission of specific capital replenishment plans from each bank, and all work is progressing in an orderly manner. Furthermore, I'd like to clarify that large state-owned commercial banks, as listed banks, will disclose their specific capital replenishment plans promptly and in compliance with relevant regulations. Thank you.
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