China’s Smaller Banks Stung by 70% Drop in Capital Bond Sales
- Lenders’ issuance of such notes was the least since 2019 in 1Q
- Banks’ ability to aid economic-growth efforts might be curbed
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Chinese lenders have been a refuge from the crisis of confidence that gripped banks globally. But a corner of the country’s credit market has been showing that smaller lenders aren’t without some challenges of their own.
The 954 billion yuan ($139 billion) market for capital bonds from China’s city and rural commercial banks started showing strains before the recent collapse of some lenders in the US and Europe. Issuance by those mainland banks of Additional Tier 1 or Tier 2 notes slid 70% from a year earlier in January through March to the lowest quarterly level since 2019, according to data compiled by Bloomberg.