The special debt limit of 200 billion small and medium-sized banks will be used up. More than 90% of the capital injection objects come from the rural credit system

Original title: The special debt limit of 200 billion small and medium-sized banks will be used up, and more than 90% of the capital injection objects come from the rural credit system

The 200 billion yuan of special bonds used to support and defuse the risks of local small and medium-sized banks are nearing completion. According to the surging news statistics, up to now, the special debt of small and medium-sized banks has been used up to 1953 billion yuan, and 289 small and medium-sized banking institutions have been invested.

In terms of provinces, special bonds for small and medium-sized banks have been issued to 17 provinces: Shanxi, Heilongjiang, Guangxi, Sichuan, Guangdong, Liaoning, Inner Mongolia, Jiangxi, Zhejiang, Fujian, Tianjin, Shaanxi, Gansu, Hebei, Shandong, Jilin and Henan. The amount of special bonds obtained was 15.3 billion yuan, 12.3 billion yuan, 11.8 billion yuan, 11.4 billion yuan, 10 billion yuan, 19.6 billion yuan 16.2 billion yuan, 7.9 billion yuan, 5 billion yuan, 5 billion yuan, 9.3 billion yuan, 4.6 billion yuan, 12.6 billion yuan, 6 billion yuan, 10 billion yuan, 12.6 billion yuan, 25.7 billion yuan.

The use of 200 billion yuan of special bonds to support and defuse the risks of local small and medium-sized banks. (Statistics of surging journalist Chen Peizhen)

From the perspective of capital injection methods, there are indirect equity investment, share transfer agreement deposit, phased shareholding, strategic deposit agreement and other ways.

From the perspective of capital injection banks, the rural credit system accounts for the majority, with 266 rural commercial banks or rural credit cooperatives receiving special debt injection, and the amount of capital injection received by the rural credit system is 122.7675 billion yuan; A total of 23 city commercial banks received capital injection from special bonds, and the amount of capital injection received by city commercial banks was 72.532.5 billion yuan. It is worth mentioning that the city commercial banks receiving capital injection include Bank of Jiangxi (01916. HK), Jiujiang Bank (06190. HK), two listed banks, and Bank of Shanxi and Liaoshen Bank, two newly established provincial city commercial banks.

Rural credit system is the main capital injection target of special bonds of small and medium-sized banks

The surging news observed that the rural credit system was the main target of the special debt injection of small and medium-sized banks. Of the 289 small and medium-sized banks that received capital injection, 266 are rural credit system banks, accounting for more than 90%. Among them, Gansu Province, Heilongjiang Province and Henan Province rank the top three in the number of rural credit institutions with capital injection.

According to the disclosed information, the special debt amount of Gansu Province to support small and medium-sized banks is 12.6 billion yuan, and the issuance period is 10 years. The special bonds of small and medium-sized banks in Gansu Province are used to supplement the capital of 48 small and medium-sized banks in the rural credit system of 13 cities and prefectures, including Lanzhou City, Tianshui City, Dingxi City, Wuwei City, Jinchang City, Jiuquan City, Pingliang City, Qingyang City, Longnan City, Linxia Hui Autonomous Prefecture, Gannan Tibetan Autonomous Prefecture, Baiyin City. As for the way of capital injection, the financial bureau of the region where the bank (society) belongs shall be the subject of subscription for the deposit under the share transfer agreement to inject the raised capital in the form of deposit under the share transfer agreement.

The total amount of special bonds issued by Heilongjiang Province to support the development of small and medium-sized banks is 12.3 billion yuan, and the bond term is 10 years. The funds raised from special bonds of small and medium-sized banks in Heilongjiang Province are used to support the development of 44 small and medium-sized banks in 13 regions including Heilongjiang Province, Harbin, Mudanjiang, Jiamusi and Yichun.

There are two ways of capital injection to support the special bonds of small and medium-sized banks with 12.3 billion yuan in Heilongjiang Province: first, 16 banks have a total of 5.32025 billion yuan of bond funds to replenish their capital to the banks using funds through the way of equity swap agreement deposits by the financial bureaus at all levels; Second, Heilongjiang Financial Holding Group Co., Ltd., as the capital operating entity, injected a total of RMB 6.97975 billion in bond funds to the loan using banks through indirect equity investment.

Henan Province supports the development of small and medium-sized banks by issuing 25.7 billion yuan of special bonds with a term of 10 years. The raised funds of special bonds of small and medium-sized banks in Henan Province were indirectly invested by Henan Investment Group Co., Ltd., and 18 rural credit cooperatives and 22 rural commercial banks in Henan Province were targeted for capital injection to supplement their core tier one capital.

23 urban commercial banks received capital injection, including 2 listed banks and 2 newly established provincial urban commercial banks

A total of 23 urban commercial banks received capital injection from small and medium-sized special bonds, and the amount of capital injection received by urban commercial banks was 72.532.5 billion yuan. These include two listed urban commercial banks in Jiangxi Province and the newly established provincial urban commercial banks in Shanxi Province and Liaoning Province.

Shanxi Province and Liaoning Province use the funds raised by special bonds of small and medium-sized banks as capital contributions of newly established city commercial banks, and both provinces inject special bond funds through indirect equity participation of financial holding groups. Bank of Shanxi received 15.3 billion yuan of special bonds from small and medium-sized banks, and Bank of Liaoshen received 10 billion yuan of special bonds from small and medium-sized banks.

Among the banks that received 200 billion yuan of capital injection from small and medium-sized banks, there are also two listed banks in Jiangxi: Bank of Jiangxi and Bank of Jiujiang, which received 3.9 billion yuan and 2 billion yuan of capital injection respectively. These two banks are all connected with local government special debt funds through the deposit business of equity swap agreement, and fully replenish other tier one capital.

The main ways of capital injection are inter access shares and share conversion deposit agreements

On July 1 last year, the executive meeting of the State Council decided to arrange a certain amount in the distribution of new local government special bonds in 2020, allowing local governments to explore new ways to reasonably supplement the capital of small and medium-sized banks by subscribing convertible bonds according to law and regulations.

On September 3, the People's Bank of China issued the China Financial Stability Report (2021), which disclosed that the Ministry of Finance has arranged a special debt quota of 200 billion yuan to support small and medium-sized banks in 20 regions to supplement capital. If calculated according to this, there may be the remaining 4.7 billion yuan allocated by the three provinces.

From the current way of capital injection, Shanxi, Guangdong, Liaoning, Zhejiang and Henan provinces inject special debt funds into small and medium-sized banks by means of indirect equity investment of financial holding groups or investment groups; Guangxi, Sichuan, Inner Mongolia, Jiangxi, Fujian, Tianjin, and Gansu provinces and autonomous regions inject special debt into small and medium-sized banks by transferring the financial departments of cities to local cities in the form of share transfer agreement deposits; Heilongjiang Province adopts a mix of two capital injection methods, namely, share transfer agreement deposit and indirect share investment, Shaanxi Province adopts a mix of two capital injection methods, namely, stage shareholding and share transfer agreement deposit, and Jilin Province adopts a mix of two capital injection methods, namely, strategic deposit agreement and share transfer agreement deposit. Hebei Province and Shandong Province have not disclosed the method of capital injection.

It is worth mentioning that the deposit under the share conversion agreement is an innovative capital tool to supplement the capital of small and medium-sized banks. It is to inject local government bond funds that can be used to supplement the capital of small and medium-sized banks into the target bank in the form of deposits to supplement the capital of the target bank. At the same time, the deposit under the share conversion agreement and the long-term agreement of the target bank stipulate that when the conditions for share conversion are met, the deposit will be converted into ordinary shares, Or the target bank will repay the principal and interest after the deposit under the share conversion agreement expires or can be redeemed.