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<Research>Citi Expects PSBC, BANKCOMM, BOC Among 1st Batch of CN Banks of Capital Restructuring Plan
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Citi’s report cited Bloomberg’s report that mainland China plans to pump approximately RMB400 billion into the first batch of banks, including ABC (01288.HK) and BANKCOMM (03328.HK), as early as June this year. However, Citi posited that ABC may not be among the initial recipients, suggesting instead that PSBC (01658.HK), BANKCOMM and BANK OF CHINA (03988.HK) are more likely candidates due to their relatively weaker capital positions compared to peers. According to Citi, with the National People’s Congress (NPC) expected to convene on March 5, the government is anticipated to announce the issuance of RMB2.3 trillion in special-purpose treasury bonds for the year. This includes RMB1 trillion in treasury bonds to bolster the capital restructuring of the six major banks and RMB1.3 trillion in treasury bonds to support initiatives such as "consumer goods trade replacement", "equipment upgrades", and "key infrastructure projects". The fiscal deficit ratio of mainland China may rise to 4% in 2025, primarily due to fund subsidies for retirement pensions and newborn policies. Additionally, the issuance quota for local government special bonds is projected to rise to RMB4.4 trillion in 2025, with an estimated RMB800 billion earmarked for debt swaps by local government financing platforms. While further details on the capital restructuring of the six major banks are expected at the NPC meeting, the outlined stimulus measures alone may not suffice to meaningfully alter the current deflationary outlook in mainland China. AAStocks Financial News |
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