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Four of China’s largest banks will collect a combined RMB520BN ($ 72 billion) by selling investor shares, including the finance ministry, as Beijing is trying to use its huge banking sector against pressing economic problems.
Bank of China, Communications Bank, Postal Savings House of China and China Construction Bank have said they will raise RMB165BN, RMB120BN, RMB130BN and RMB105BN, respectively, on Sunday’s stock market.
The Ministry of Finance will be a major investor in “Capital Raising” by the four banks, which are all state and collectively around RMB10TN in capital since last June.
Rare injections aimed at the government will increase the basic capital of the banks’ banks that regulators use to restrict support are part of a series of official support measures that are intended to restore the world’s second-largest confidence in the world last September. Economics.
China He is struggling with the threat of deflation, poor consumer spending and slowing the property now well in his fourth year, and policy makers have recently adapted a more meaningful tone as they are trying to restore confidence.
The largest banks in the country are facing pressure on the margin and the increase in capital, which was previously marked by the authorities, is part of the pressure to strengthen the loan in conditions of continuous weakness in the economic critical sector of property.
Net -Kamati Bank of China – a profitability measure – dropped to 1.4 %last year, by 1.59 %, while the Bank of Communications narrowed to 1.27 %.
Authorities have set a 5 % GDP growth target for 2025 at a meeting of top policy makers this month, where they also promised to issue RMB500BN in special bonds to finance capital injections in the banking sector.
Chinese exports are the subject of fresh tariffs from the Trump administration in the United States, which was originally an additional 10 % in February before doubling this month to 20 %. Exports last year was a driver of growth, as the fall in housing prices was measured by consumption.
“Injections will increase the availability of funds to support country growth in tariff heads,” S&P analysts wrote this month. They added that “Megabans play an important role in supporting the government’s social and economic initiatives through policy loans promoted areas.”
Policy makers initially signaled recapitalization of China’s largest banks in September last year, when Beijing discovered mortgage reductions and stock market redemption. The capital market has subsequently withdrawn after years of decline, with the CSI 300 meter of Shanghai and Shenzhen, for storing more than 10 % in the past year.
But the real estate sector still weighs a lot of confidence, with new home prices decreasing in February and developing investments dropped by 10 percent compared to last year. Chinese property developers have about RMB12TN commitments in total, according to an estimate of 2023 from the National Statistics Bureau.
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