Many small and medium-sized banks across multiple regions are raising capital intensively!

Xue Jin China Securities Journal

Listed banks are continuously leveraging market-based tools to optimize their capital structures. Recently, Chengdu Bank announced that its registration capital change has been approved, allowing the bank to redeem convertible bonds early and delist the bonds, thereby increasing capital.

Recently, many small and medium-sized banks across various regions have accelerated their capital increases. According to incomplete statistics from China Securities Journal, since 2026, dozens of non-listed banks have been approved to increase their registered capital.

Intensive Capital Increases by Banks

Chengdu Bank recently announced that its convertible bonds will be redeemed early in 2025 and delisted, increasing its total shares to 4.238 billion. Previously, the bank had applied to the Sichuan Financial Regulatory Bureau for a change in registered capital. The bank recently received approval, with the Sichuan Financial Regulatory Bureau agreeing to increase its registered capital from 3.736 billion yuan to 4.238 billion yuan.

For listed banks, redeeming convertible bonds is an effective way to supplement capital. After conversion, the bank’s equity portion in its capital structure increases, and debt decreases, thereby improving the core Tier 1 capital adequacy ratio, enhancing the bank’s risk resistance, and providing sufficient capital support for steady asset expansion and business development.

Non-listed banks are also actively supplementing capital. Private placements, as a mainstream and direct method of capital increase, involve issuing new shares to specific investors, quickly boosting core Tier 1 capital and directly enhancing the bank’s risk resistance.

On March 10, the National Financial Regulatory Administration disclosed that the Sanming Regulatory Branch recently approved the capital increase plan for Yong’an HSBC Village Bank, which will issue an additional 15 million yuan of registered capital to HSBC Hong Kong Shanghai Bank, with HSBC subscribing in cash.

Recently, Hubei Bank disclosed a private placement report, completing a 1.8 billion share issuance, raising 7.614 billion yuan, all used to supplement core Tier 1 capital.

According to information disclosed by regulatory authorities this year, many city commercial banks, rural commercial banks, and village banks across various regions have received approval for capital increases.

For example, Yaan City Commercial Bank’s registered capital increased from 1.899 billion yuan to 2.856 billion yuan; Xinjiang Bank’s registered capital increased from 7.906 billion yuan to 12.223 billion yuan; Qinghai Bank increased its registered capital by 648 million yuan and changed its shareholder holding more than 5% of shares, with a post-increase registered capital of 3.205 billion yuan; Dongying Bank increased its registered capital by 447 million yuan to 4.843 billion yuan; Shanxi Bank’s registered capital grew from 25.894 billion yuan to 27.309 billion yuan.

Financial and Regional Development Resonate Together

Data from the National Financial Regulatory Administration shows that at the end of Q4 2025, China’s commercial banks had a capital adequacy ratio of 15.46%, a Tier 1 capital adequacy ratio of 12.37%, and a core Tier 1 capital adequacy ratio of 10.92%. Some small and medium-sized banks have significantly lower capital adequacy levels than the industry average.

Recently, small and medium-sized banks have launched a wave of capital increases through market-based tools such as convertible bond redemptions, private placements, and profit reinvestment to boost capital, with a clear trend of local state-owned assets entering the market.

For example, Hubei Bank has introduced 53 corporate shareholders, including 35 state-owned legal entities. Local state-owned enterprises from various cities and counties within Hubei Province have become main subscribers, significantly increasing state ownership. Four state-owned shareholders, including the Finance and Financial Bureau of Yaan Economic and Technological Development Zone, have invested in Yaan City Commercial Bank, increasing its state-owned shareholding. In Qinghai Bank’s capital increase, two provincial state-owned enterprises—Western Mining Group and Qinghai Transportation Holding Group—gained shareholder status. Shanxi Bank’s capital increase was solely funded by the Shanxi Provincial Finance Department.

Industry experts believe that the entry of local state-owned assets provides a solid foundation for the expansion and risk resistance of small and medium-sized banks. It not only helps banks quickly replenish capital but also brings regional resource synergy effects, which can improve the shareholding concentration of local small and medium-sized banks, standardize operations, improve corporate governance, and facilitate smoother guidance of bank credit towards infrastructure, key industries, inclusive finance, and rural revitalization, aligning financial development with regional growth.

“After capital increases and share expansion, on one hand, banks’ capital strength is enhanced, improving their ability to serve the real economy and maintain stable development; on the other hand, a stable equity structure helps maintain governance continuity, enabling the bank’s strategic development to be more sustainable,” said Dong Ximiao, Deputy Director of the Shanghai Financial and Development Laboratory.