Recently, Hong Kong-listed Bank of Jiujiang announced that its board of directors has received letters of intent from two major shareholders, the Jiujiang Municipal Finance Bureau and Industrial Bank Co., Ltd., indicating their intention to subscribe to the bank's domestic shares.
In October 2025, Bank of Jiujiang announced its plan for a private placement of up to 860 million domestic shares and up to 175 million H-shares. The subscribers for the domestic shares may include major existing shareholders. If the full offering is completed, the bank's total share capital will increase from 2.847 billion shares to 3.882 billion shares, representing an increase of approximately 36%.
According to the announcement, the respective subscription amounts from the Jiujiang Municipal Finance Bureau and Industrial Bank, as a proportion of the total funds raised, will not exceed their current shareholding percentages in Bank of Jiujiang.
The Jiujiang Municipal Finance Bureau intends to subscribe for an amount not exceeding 500 million yuan (Renminbi), and its subscription amount as a proportion of the total funds actually raised in this offering will not exceed its shareholding in the bank, which is approximately 12.85%. Industrial Bank's intended subscription amount as a proportion of the total funds raised will not exceed its shareholding in the bank, which is approximately 10.24%.
As of the end of June 2025, the Jiujiang Municipal Finance Bureau and Industrial Bank were the largest and third-largest shareholders of Bank of Jiujiang's domestic shares, respectively.
Bank of Jiujiang stated that the primary purpose of this issuance is to effectively replenish the bank's core tier 1 capital, substantially enhance its risk resilience, and optimize its shareholding structure.
"The intention of the major shareholder subscribers to participate in the domestic share placement demonstrates their positive outlook for the bank's future and their support for its long-term development. This is conducive to optimizing the bank's capital structure, strengthening the core competitiveness of its main business, and creating greater value for shareholders," Bank of Jiujiang stated.
The announcement indicated that Bank of Jiujiang and its major shareholder subscribers plan to enter into subscription agreements as the domestic share issuance progresses. The final number of shares to be subscribed for and the subscription price will be determined based on the final subscription agreements.
According to the bank's disclosed interim report for 2025, its core tier 1 capital adequacy ratio stood at 8.62% as of the end of June 2025, a decrease of 0.82 percentage points from the end of 2024. Both its tier 1 capital adequacy ratio and total capital adequacy ratio also declined compared to the end of 2024. In November 2025, the bank received approval from the Jiangxi Financial Regulatory Bureau to issue perpetual capital bonds with a total amount not exceeding 70 billion yuan (inclusive).
It has been noted that in recent years, regional small and medium-sized banks have been intensively raising capital and expanding their share capital, with several instances of large-scale capital increases. For example, in 2025, Weihai Bank, also listed in Hong Kong, announced plans to issue up to approximately 758 million domestic shares and up to approximately 154 million H-shares. The net proceeds from the issuance, after deducting related expenses, will be entirely used to supplement the bank's core tier 1 capital.
The capital increase and share expansion of Hankou Bank was also finalized in 2025. Last year, the bank completed the issuance of 873.53 million shares, increasing its total share capital from 4.828 billion shares to 5.701 billion shares, an increase of 18%. The total funds raised amounted to 4.586 billion yuan.
Tian Lihui, a finance professor at Nankai University, commented that capital increases by regional small and medium-sized banks help enhance their "self-generating" capabilities. Firstly, the safety buffer for regulatory indicators is thickened, as an improved capital adequacy ratio directly strengthens a bank's credit expansion and risk resilience. Secondly, the governance structure is optimized, as new shareholders can bring fresh professional resources. Thirdly, the bank's capacity to serve its primary local responsibilities and main businesses will be systematically enhanced.
"Only after strengthening their capital base do banks have the capability and room to lower their service focus, precisely allocating credit resources to vulnerable segments of the real economy such as small and micro businesses and rural revitalization, thereby forming a virtuous cycle with local economic development," Tian Lihui stated.