On October 8, the Ministry of Finance completed the tender for the first tranche of 2026 special treasury bonds for capital injection into central financial institutions, with a scale of RMB150 billion, a term of 5 years, and a coupon rate of 1.37%. On the same day, the applications of ICBC, ABC and PICC to issue shares to specific targets were accepted by the Shanghai Stock Exchange.

The launch of the special treasury bond issuance and the simultaneous entry of the private placement applications of the three A-share listed institutions into the review process mark the beginning of the transition from plan to execution for the Ministry of Finance's RMB300 billion capital injection into central financial institutions.

This round of capital injection corresponds to the RMB360 billion capital increase plan for eight central financial institutions announced on September 6, of which the Ministry of Finance plans to contribute approximately RMB300 billion and the China Tobacco system plans to subscribe RMB60 billion.

The RMB150 billion special treasury bond issued on October 8 is the first batch of funds under the Ministry of Finance's RMB300 billion contribution arrangement.

The first tranche of special treasury bonds began accruing interest on October 9 and will be listed for trading on October 13. The Ministry of Finance previously notified that it plans to tender and issue 7-year special treasury bonds on November 18, with the specific scale to be announced before issuance.

Under the RMB360 billion capital increase plan for the eight institutions, ICBC and ABC together plan to raise RMB260 billion, accounting for more than 70% of the total:

ICBC plans to issue A-shares to raise no more than RMB100 billion, of which the Ministry of Finance plans to subscribe RMB70 billion and the China Tobacco system plans to subscribe RMB30 billion; ABC plans to raise no more than RMB160 billion, of which the Ministry of Finance plans to subscribe RMB130 billion and the China Tobacco system plans to subscribe RMB30 billion.

As of the end of June 2026, ABC's core tier-one capital adequacy ratio was 10.80%, while ICBC's was 13.21%. In this round of the plan, ABC received a subscription quota of RMB130 billion from the Ministry of Finance, while ICBC received RMB70 billion.

PICC plans to issue A-shares to the Ministry of Finance through a targeted placement, with total funds raised not exceeding RMB15 billion. The relevant proposal had previously been approved by the shareholders' meeting.

After the applications are accepted, the three institutions will enter the exchange review and regulatory registration stages. After ICBC, ABC and PICC complete their issuances, the corresponding contributions from the Ministry of Finance will be counted toward their respective capital replenishment arrangements.

In addition to the three A-share listed institutions whose applications were accepted by the Shanghai Stock Exchange, the other five institutions plan to increase capital by a total of RMB85 billion. The Export-Import Bank of China plans to receive a direct capital injection of RMB30 billion from the Ministry of Finance, China Life Insurance Group plans to receive RMB35 billion, China Taiping plans to receive RMB7 billion, Sinosure plans to receive RMB10 billion, and China Re plans to receive a targeted injection of RMB3 billion.

From major banks to insurance and policy-based financial institutions, the coverage of this round of capital injection has expanded compared with the first round in 2025.

In 2025, the Ministry of Finance issued RMB500 billion in special treasury bonds to replenish core tier-one capital for Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China; this round incorporates ICBC, ABC, centrally administered insurance enterprises and policy-based institutions into the same arrangement.

Dong Ximiao, chief economist of Zhaolian and deputy director of the Shanghai Finance and Development Laboratory, believes that against the backdrop of declining interest rates and narrowing net interest margins, banks' endogenous capital accumulation has weakened, and capital replenishment serves both to enhance risk resistance and to support business expansion.

Dong Ximiao estimates that RMB300 billion in capital funds could leverage approximately RMB4 trillion in asset growth. The asset expansion space created by capital replenishment will be transmitted to the real economy through bank credit extension, insurance fund allocation and policy-based financial services.

The inclusion of insurance and policy-based institutions in the support scope also expands the functional boundaries of this round of capital injection. The role of new capital for insurers will be reflected in solvency, risk protection and long-term fund allocation, while policy-based institutions will take on functions such as foreign trade financing and export credit insurance.

At present, the first tranche of special treasury bonds has been issued, and the private placement applications of ICBC, ABC and PICC have been accepted. The focus will next fall on the follow-up issuance arrangements for special treasury bonds, the review and registration progress of the three institutions, and the actual investment direction and effectiveness of the new capital of various institutions.