China’s four largest state-owned banks have announced plans to raise a staggering 520 billion yuan ($71.6 billion / KSh 9.4 trillion) through private placements, as Beijing moves to strengthen the banking sector and support the economy.
The massive fundraising effort follows a 500 billion yuan (KSh 9 trillion) recapitalization pledge by Chinese policymakers earlier this month, aimed at enhancing the banks’ ability to lend and stabilize economic growth.
The fundraising breakdown includes:
- Bank of China – Up to 165 billion yuan (KSh 3 trillion)
- China Construction Bank – Up to 105 billion yuan (KSh 1.9 trillion)
- Bank of Communications – Up to 120 billion yuan (KSh 2.2 trillion)
- Postal Savings Bank of China – Up to 130 billion yuan (KSh 2.3 trillion)
China’s Ministry of Finance, a major shareholder in these banks, will play a central role in the capital injections. Notably, it will become the controlling shareholder of Bank of Communications following the share issuance.
Analysts have urged Beijing to move fast in recapitalizing major banks to support lending, revive growth, and stabilize the financial system.
China has set an economic growth target of 5% for this year—unchanged from 2023—as it ramps up fiscal spending to fight deflation and counter U.S. tariffs.
With interest rate cuts on the horizon, China’s banks will have to brace for tighter margins, making this record-breaking capital raise crucial for their future stability.
