Caijing.com Financial News Since 2021, banks’ perpetual bond issuers have further expanded their capacity. On July 22, the Export-Import Bank of China announced that it plans to issue 2021 open-term capital bonds (the first tranche) in the national inter-bank bond market on July 27. The current issue of bonds is planned to be 60 billion yuan. The Export-Import Bank thus became the first policy bank to issue perpetual bonds.
The announcement shows that the funds raised this time will be used to enrich the bank’s other Tier 1 capital to enhance its operational strength, improve its ability to resist risks, and support the sustained and stable business development.
Since Bank of China took the lead in successfully issuing the first 40 billion yuan perpetual bonds in January 2019, perpetual bonds have become a powerful tool for more and more commercial banks to supplement other Tier 1 capital.
According to Wind data, since 2021, banks’ enthusiasm for issuing perpetual bonds has continued to rise. As of July 22, 29 commercial banks have issued 33 perpetual bonds, with a total issuance of 318.5 billion yuan. Specifically, it includes 4 state-owned banks, 3 joint-stock banks, 16 city commercial banks, 5 rural commercial banks, and 1 private bank. According to the financial statistics of Caijing.com, the number of issuances increased by nearly 74% compared with the same period last year.
In fact, the lineup of perpetual bond issuers has been expanding. In addition to policy banks, private banks joined the ranks of issuance last year. In July 2020, Internet Commercial Bank successfully issued 2.5 billion yuan of perpetual bonds, becoming the first private bank to issue perpetual bonds to supplement capital. Up to now, the online commercial bank has completed a total of 4 billion yuan perpetual bond issuance.
【Author: Qian Xiaorui】 (Editor: Qian Xiaorui)
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