Since the beginning of 2026, China's banking industry has witnessed a new round of intensive capital increases. According to rough statistics, as of April 27, a total of 68 banks nationwide have received approvals for capital injections, with rural commercial banks accounting for 42 of these, representing over 60% of the total. Geographically, the capital increases have involved approximately 15 provinces and autonomous regions, including Hubei, Guangdong, Xinjiang, Qinghai, and Sichuan.
Overall, not only has the pace of capital augmentation accelerated noticeably compared to previous years, but the methods employed have also become more diverse. Industry observers note that the net interest margin of commercial banks has fallen to a historical low, making it urgent for small and medium-sized banks to enhance their risk resilience through capital replenishment. It is anticipated that the trend of bank capital increases will continue throughout the year, with rural commercial banks serving as the main force in this round of capital supplementation.
Commercial banks have initiated a new wave of capital increases this year. Recently, several banks have received regulatory approvals to adjust their registered capital. For instance, on April 24, the National Financial Regulatory Administration's Zhejiang Bureau approved Hangzhou Bank's request to increase its registered capital from 5.93 billion yuan to 7.249 billion yuan.
On April 20, the National Financial Regulatory Administration's Foshan Bureau approved Shunde Rural Commercial Bank's application to raise its registered capital by 254 million yuan, from 5.082 billion yuan to 5.336 billion yuan. Prior to this, on April 10, China CITIC Bank's plan to adjust its registered capital also received approval from the National Financial Regulatory Administration, allowing an increase of 6.71 billion yuan, from 48.935 billion yuan to 55.645 billion yuan.
A rough review of information from the National Financial Regulatory Administration indicates that, as of April 27, 68 banks have received regulatory approval for applications related to adjusting their registered capital or capital increase plans. Among these, rural commercial banks constituted the largest group, with 42 institutions, accounting for over 60% of the total. In contrast, state-owned banks and joint-stock banks were represented by only one institution each, namely Postal Savings Bank of China and China CITIC Bank.
Beyond the密集 approvals for capital increases, commercial banks are also hastening the implementation of registered capital adjustments. For example, on March 7, Bank of Chengdu announced that it had received approval from the Sichuan Financial Regulatory Bureau to increase its registered capital from 3.736 billion yuan to 4.238 billion yuan, a rise of 13.46%. By the end of that month, the bank had completed the industrial and commercial registration changes.
Further rough statistics show that, geographically, the approved capital increases this year have involved around 15 provinces and autonomous regions, including Hubei, Guangdong, Xinjiang, Qinghai, Sichuan, Shanxi, and Hebei. Some regions even exhibit characteristics of concentrated capital increases among commercial banks, with significant scale seen in areas like Hubei, Qinghai, Sichuan, and Xinjiang.
Rural commercial banks have become the absolute main force in bank capital increases this year. Within this wave of capital augmentation, rural commercial banks, representing small and medium-sized banks, hold a dominant position. Lou Feipeng, a researcher at Postal Savings Bank of China, stated that the current密集 capital increases by commercial banks are primarily aimed at enhancing capital strength, supporting expansion, or meeting regulatory requirements.
"Currently, the net interest margin of commercial banks has dropped to a historical low, and small and medium-sized banks urgently need to improve their risk resilience through capital replenishment. Furthermore, as large banks penetrate county-level markets and internet platforms compete for long-tail customers, small and medium-sized banks face significant pressure to补充 capital in order to compete for market share and serve their clients," Lou Feipeng said. He added that after capital increases, the risk-bearing capacity of these banks will strengthen, and their credit allocation will focus more on inclusive finance, green credit, and technological innovation, thereby directing more financial resources to regional characteristic industries.
Indeed, the urgency of capital needs among small and medium-sized banks is reflected in industry data. Figures from the National Financial Regulatory Administration for the end of the fourth quarter of 2025 show that the capital adequacy ratio of rural commercial banks was only 13.18%, below the industry average of 15.46%. Simultaneously, the non-performing loan ratio of rural commercial banks reached 2.72%, significantly higher than the industry average of 1.5%.
Dong Ximiao, Chief Researcher at Zhaolian and Deputy Director of the Shanghai Finance and Development Laboratory, stated, "It is expected that in 2026, the intensity and frequency of capital replenishment in the banking industry will further increase. Particularly, this year's Government Work Report explicitly called for多渠道加大资本补充力度. It is anticipated that commercial banks will have more choices and diversified methods for capital replenishment in the later stages."
Additionally, senior industry experts predict that the number of banks approved for capital increases throughout 2026 may exceed 150, with rural commercial banks remaining the primary contributors. Concurrently, the establishment of provincial-level rural commercial banks and the reform of rural credit cooperatives will continue, aiming to enhance the overall competitiveness of rural financial institutions.
Regarding the regional disparities in bank capital increases, Lou Feipeng indicated that the differentiation mainly stems from variations in regional economic vitality, bank asset quality, and the level of support from local governments. Banks in economically developed regions, with lower non-performing loan ratios and stronger profitability, find it easier to attract strategic investments. "Currently, banks in economically active regions like the Yangtze River Delta and Pearl River Delta have stronger capital replenishment capabilities, and investors show higher participation enthusiasm. In contrast, banks in regions like Northeast and Northwest China face greater challenges," he said.
Local state-owned capital still plays a dominant role, while the methods of capital increase have become more diversified. Notably, this wave of bank capital increases exhibits several distinct characteristics compared to previous years.
Lin Yingqi, Director of Research at China International Capital Corporation (CICC) and a banking analyst, pointed out that, firstly, the participating entities are broader, including county-level rural commercial banks and village banks becoming significant contributors. Secondly, coordinated capital injections from local state-owned entities, fiscal authorities, and high-quality enterprises have become more common, significantly enhancing the stability of the capital increases. Thirdly, the methods are more diverse, with parallel channels such as private placements and issuing convertible bonds to supplement capital.
Specifically, among the 68 banks approved for capital increases this year, besides city commercial banks and rural commercial banks, there were also 9 rural credit cooperatives and 6 village banks, accounting for 13.2% and 8.8% respectively, both ranking high.
Furthermore, in this round of capital increases, several banks have utilized the conversion of convertible bonds into equity. For example, China CITIC Bank's registered capital increase to 55.645 billion yuan resulted from the conversion of its A-share convertible corporate bonds. The bank publicly issued these bonds with a total face value of 40 billion yuan in March 2019, with a term of 6 years maturing on March 3, 2025. The conversion of these bonds led to the change in the bank's share capital.
Bank of Chengdu's registered capital adjustment also originated from this method. Reportedly, the bank issued 8 billion yuan in convertible bonds in March 2022. By the redemption registration date of February 5, 2025, the conversion rate of "ChengYin Convertible Bonds" reached 99.94%, with cumulative conversion exceeding 626 million shares.
Additionally, private placements have become a mainstream tool for capital increases among small and medium-sized banks. For instance, Hubei Jingshan Rural Commercial Bank privately placed 35 million new shares to Hubei Wusan Industrial Investment Co., Ltd. Following this placement, the investment company's shareholding ratio increased to 7.76%.
The industry is calling for the acceleration of establishing a long-term mechanism for capital replenishment in small and medium-sized banks. From Dong Ximiao's perspective, at this stage, capital replenishment for small and medium-sized banks remains critically needed. He suggests supporting these banks in accelerating the establishment of a long-term capital replenishment mechanism, broadening their capital补充 channels, innovating capital instruments, and enhancing their capital补充 capabilities.
To this end, he recommends expanding the scope of using local government special bonds for capital supplementation and extending their usage period. He also suggests that special government bonds, guided by the principle of "one bank, one policy," should倾斜 towards key city commercial banks and rural commercial banks to enhance the capital strength of non-risk local legal person institutions, enabling them to better serve local economic development. Simultaneously, he advises appropriately optimizing shareholder qualification conditions and shareholding requirements, simplifying approval processes, and supporting small and medium-sized banks in introducing qualified shareholders through private placements or capital increases and expansions.
Furthermore, he believes that准入 conditions should be moderately relaxed to support small and medium-sized banks in issuing preferred shares, perpetual bonds, convertible bonds, and tier-2 capital bonds. Efforts should be intensified to support more high-quality small and medium-sized banks in achieving priority listings in domestic and international markets to补充 capital, thereby promoting these banks' abilities to better prevent financial risks and serve the real economy, particularly local economic development, small and micro enterprises.
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