Chengdu Bank's convertible bond conversion and capital increase approved, with registered capital rising to 4.238 billion yuan; multiple regional "city commercial banks" introduce state-owned capital injections to "boost their capital"

Everyday Economic Reporter | Zhang Yi Everyday Economic Editor | Yang Jun

On March 7, Chengdu Bank (SH601838, stock price 16.94 yuan, market value 71.799 billion yuan) announced that it has received approval from the Sichuan Financial Regulatory Bureau to increase its registered capital from 3.736 billion yuan to 4.238 billion yuan. The bank will handle the registration change procedures for the capital increase according to relevant regulations.

Previously, Chengdu Bank’s convertible bonds could be redeemed early and delisted in February 2025. The bank’s total shares increased to 4.238 billion, and it submitted an application to the Sichuan Financial Regulatory Bureau for the capital change.

While listed banks are optimizing their capital structure through market-based tools, since 2026, many city commercial banks across various regions have continued to increase capital and expand shares. According to incomplete statistics, Xinjiang Bank, Qinghai Bank, Shanxi Bank, and others have been approved for capital changes, and Hubei Bank completed a directed issuance of 1.8 billion shares. Notably, local state-owned assets are densely entering the market, becoming a prominent feature of this round of capital replenishment for city commercial banks.

Issuance of 8 Billion Yuan Convertible Bonds, 99.94% Conversion Rate

The capital increase at Chengdu Bank is driven by the early redemption and conversion of the “Chengyin Convertible Bond.”

Public information shows that in March 2022, Chengdu Bank issued 8 billion yuan of A-share convertible bonds, which received a total of 7,144.29 times oversubscription, setting a record for the best issuance level among domestic listed bank convertible bonds at that time. In April of the same year, the bonds were listed on the Shanghai Stock Exchange under the abbreviation “Chengyin Convertible Bond,” and entered the conversion period in September. By the end of 2024, the stock price had reached 130% of the conversion price for several consecutive trading days, triggering a conditional redemption clause. Chengdu Bank decided to exercise its early redemption rights.

As of the redemption registration date on February 5, 2025, a total of 7.995 billion yuan of “Chengyin Convertible Bonds” had been converted, with a conversion rate of 99.94%, totaling over 626 million shares, accounting for 17.34% of the total pre-conversion share capital. The remaining 49,090 bonds were redeemed, with a redemption payout of 4.941 million yuan. On February 6, 2025, the bonds were delisted from the Shanghai Stock Exchange, and Chengdu Bank’s total shares increased to 4.238 billion.

Public data shows that Chengdu Bank was established in December 1996, listed on the main board of the Shanghai Stock Exchange in early 2018, becoming Sichuan’s first listed bank and the eighth city commercial bank listed in A-shares nationwide. In 2023, the bank’s total assets surpassed one trillion yuan, making it the first city commercial bank in western China with assets exceeding one trillion yuan.

Operational data indicates that by the end of the third quarter of 2025, Chengdu Bank’s total assets had risen to 1.39 trillion yuan, a 10.81% increase from the beginning of 2025; its non-performing loan ratio was 0.68%, among the best for listed city commercial banks. In the first three quarters of 2025, the bank achieved revenue of 17.761 billion yuan, up 3.01% year-over-year; net profit attributable to the parent was 9.493 billion yuan, up 5.03% year-over-year.

Dacheng International industry research report pointed out that for already listed banks, promoting convertible bond conversion is an effective way to supplement core Tier 1 capital. Additionally, private placements are currently the most mainstream and direct method in the market, allowing banks to quickly strengthen core Tier 1 capital by issuing new shares to specific investors, thereby directly enhancing their risk resistance.

Multiple City Commercial Banks Increase Capital, Local State-Owned Assets Enter the Market

According to the State Administration of Financial Supervision and Administration, as of the end of Q4 2025, the average capital adequacy ratio of city commercial banks in China was 12.39%, lower than the 15.46% average for commercial banks. Under capital replenishment pressure, since 2026, city commercial banks’ private placements have continued to advance.

On January 4, 2026, the Sichuan Financial Regulatory Bureau announced approval for Yaan City Commercial Bank to increase its registered capital by 957 million yuan, from 1.899 billion yuan to 2.856 billion yuan. Four state-owned shareholders, including the Yaan Economic and Technological Development Zone Financial Bureau, increased their holdings, further raising the proportion of state-owned shares. On the same day, the Xinjiang Financial Regulatory Bureau also announced approval for Xinjiang Bank’s capital change, increasing its registered capital from 7.906 billion yuan to 12.222 billion yuan, an increase of over 4.3 billion yuan. Xinjiang Financial Investment (Group) invested 3.777 billion shares, holding a 30.9% stake, potentially becoming the bank’s largest shareholder.

On January 6, the Qinghai Financial Regulatory Bureau approved Qinghai Bank to increase its registered capital by 648 million yuan and to change the shareholder holding more than 5% of shares, with the new registered capital reaching 3.205 billion yuan. Among the new investors, Western Mining Group and Qinghai Transportation Holding Group, both provincial state-owned enterprises, gained shareholder status. By the end of 2024, Western Mining Group held 16.43% of Qinghai Bank’s shares, ranking as the second-largest shareholder.

In January 2026, the Shandong Financial Regulatory Bureau approved Shandong Commercial Bank to increase its registered capital by 640 million yuan, reaching 5.073 billion yuan; and approved Dongying Bank to increase its capital by 447 million yuan, reaching 4.843 billion yuan.

On February 10, the Shanxi Financial Regulatory Bureau approved an increase in the registered capital of Shanxi Bank from 25.894 billion yuan to 27.309 billion yuan. The increase was solely funded by the Shanxi Provincial Finance Department, which after the increase will directly hold 5.18% of the shares, becoming the bank’s third-largest shareholder.

In early February, Hubei Bank also completed a directed issuance of 1.8 billion shares, raising 7.614 billion yuan, with total shares increasing to 9.412 billion. Fifty-three corporate shareholders participated in the subscription, including 35 new state-owned legal shareholders.

Additionally, Jiujiang Bank disclosed in late January that it plans to issue no more than 860 million domestic shares, with major shareholders Industrial Bank and Jiujiang Finance Bureau expressing interest in subscribing. Guangzhou Bank has also recently been reported to be considering capital increase and share expansion.

In this round of capital increases among city commercial banks, the dense participation of local state-owned assets has become a notable feature. Dacheng International’s research report believes that the involvement of local state-owned assets not only brings capital but also implicit credit guarantees and regional resource synergy, which can significantly boost market confidence in banks and stabilize liabilities. However, the report also notes that capital replenishment is not a “permanent cure,” and the sustainability of its positive effects remains to be tested.