Oddbean

China mulling US$142b capital injection into top banks, Bloomberg reports ========== China is considering a capital injection of up to one trillion yuan (US$142 billion) into its largest state banks to bolster their ability to support the struggling economy; this would be the first capital injection since the 2008 financial crisis; funding will primarily come from new special sovereign bonds; the top six banks, including Industrial & Commercial Bank of China Ltd (ICBC) and Bank of China Ltd (BOC), are facing record low margins and rising bad debt; Li Yunze, the top banking regulator, indicated a need to boost core Tier 1 capital; combined profits of commercial lenders rose only 0.4% in the first half of 2024; the average core Tier 1 capital adequacy ratio for the six largest banks was 11.77% at the end of June; the government has previously intervened to support banks, including a US$60 billion recapitalization in the early 2000s and a US$19 billion bailout for Agricultural Bank in 2008. #China #Banking #CapitalInjection #Economy #SovereignBonds #Icbc #Boc #FinancialCrisis #Regulation #Profits https://theedgemalaysia.com/node/728057