&#34;Last year, our bill size decreased by more than 100 billion, and the proportion of bills in the total loan amount also declined. This year, our goal is to further reduce it, aiming for around 100 billion.&#34; A person from the asset-liability department of a certain joint-stock bank recently told Jiemian News reporters.
For a long time, bills have been regarded as &#34;hot cakes&#34; by commercial banks due to their advantages in adjusting credit scale. However, since 2023, this enthusiasm has clearly faded, and the continuous &#34;reduction of bills&#34; has become the norm in the industry.
According to statistics from Jiemian News reporters, between 2023 and June 2025, several listed banks have reduced their bills by more than 50%; by bank type, the banks reducing bills are concentrated in joint-stock banks and city commercial banks. For many commercial banks, bill assets have transformed from &#34;sweethearts&#34; to &#34;burdens.&#34;
Interviews with Jiemian News reporters revealed that the reduction of bills by small and medium-sized banks is mainly driven by three factors: regulatory authorities have downplayed the assessment of credit scale, the motivation for commercial banks to push bills has decreased; the discount yield of bills has significantly dropped, making it difficult to cover liability costs; and some arbitrage mechanisms have disappeared.
It is noteworthy that while small and medium-sized banks are reducing bills, the balance of bill assets at the four major banks is still rising against the trend. Why is this the case?
<h3>Several Banks' Bill Assets Halved</h3>
Bills, simply put, are IOUs given by a buyer to a seller when cash is not provided after a sale. If this IOU is guaranteed by a bank for payment, it is called a banker's acceptance; if it is issued by an ordinary enterprise, it is a commercial acceptance. When the bill-holding enterprise urgently needs funds, it can transfer the unexpired bills to the bank for discounting.
&#34;This essentially amounts to the bank lending to the bill-holding enterprise. After completing the discount, the bank debits the bill discounting account in its balance sheet as part of corporate loans,&#34; a person from the asset-liability department of a joint-stock bank in a western province told Jiemian News reporters.
Listed banks generally disclose their holdings of bills in their financial reports. According to statistics from Jiemian News reporters, for a considerable period, the overall balance of bills in commercial banks has shown a steady growth trend. However, since 2023, many joint-stock banks and city commercial banks have significantly reduced their bills, with some reductions exceeding 50%.
Among them, Xi'an Bank (600928.SH) has the largest reduction. Financial report data shows that as of the end of June 2025, the bank's bill discount balance was 700 million yuan, a decrease of 94% compared to the end of 2023; the proportion of bills in the bank's loans also dropped from 6% to 0.25%.
Similarly, the bill discount balance of Minsheng Bank (600016.SH) decreased from 277.6 billion yuan at the end of 2023 to 119.1 billion yuan at the end of June 2025, a reduction of nearly 60%. Additionally, the bill discount balances of three banks, including Changsha Bank (601577.SH), have decreased by more than 50%, and many other listed banks have also seen varying degrees of decline in their bill balances.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/O_cI2gNdgeTzmgRe-Uw5hNoyqmqL2bvDVGTS-s2RGOeO4AA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/O_cI2gNdgeTzmgRe-Uw5hNoyqmqL2bvDVGTS-s2RGOeO4AA/641"/> Jiemian News reporters organized based on enterprise warning information
It is important to note that although the reduction is significant, many banks still retain a certain scale of bills. &#34;In the modern financial system, bills are primarily a payment tool, and only secondarily a financing tool. Some clients also have discounting needs; if you don't provide this service, then clients will be lost, so the bill balance cannot be reduced to zero,&#34; said a person from the asset-liability department of a joint-stock bank's western provincial branch to Jiemian News.
Some listed banks have also clearly stated in their performance meetings that they aim to reduce bills. In August last year, then-president of China CITIC Bank (601998.SH), Lu Wei, stated at the bank's mid-year performance meeting that bill assets are one of the asset categories of banks, but their returns are relatively low. When market interest rates fluctuate, they may even become a drag on returns. In the first half of 2025, China CITIC Bank actively and significantly reduced the scale of bill assets, cutting 140 billion yuan in the first quarter and another 80 billion yuan in the second quarter.
According to financial report data, at the end of 2023, the bill discount balance of China CITIC Bank was over 500 billion yuan, but by the end of June 2025, it had fallen below 230 billion yuan, a reduction of more than 50%.
<h3>Significant Decline in Bill Discount Yield</h3>
The significant decline in bill discount yield, which is difficult to cover the cost of liabilities, is a key reason for joint-stock banks and city commercial banks to reduce bills. &#34;The yield on bills is too thin now, even thinner than interbank assets, so our strategy is to resolutely reduce it,&#34; said a person from the asset-liability department of a joint-stock bank's headquarters to Jiemian News.
Taking China CITIC Bank as an example, in 2021, the bank's bill discount yield was 2.85%, which was 60 basis points higher than its cost of liabilities; however, in the first half of 2025, the bill discount yield dropped to 1.16%, which was more than 50 basis points lower than its cost of liabilities.
This is not an isolated case; the entire industry is facing such a situation. According to market institutions' data, before 2023, the market's weighted yield on bill discounts was around 3%, but it has rapidly declined since 2023, dropping to around 1.2% by 2025. This yield level is significantly lower than the cost of bank liabilities, putting commercial banks' bill business in a &#34;more done, more lost&#34; situation.
The aforementioned person from the asset-liability department of a joint-stock bank's headquarters told Jiemian News: &#34;In previous years, we focused on growth, but in the past two years, we have placed more emphasis on value creation, and efficiency will become increasingly important. This requires the asset side to increase the proportion of credit assets, especially high-yield loans. Low-efficiency assets like bills will continue to be reduced, freeing up resources to invest in more valuable areas.&#34;
Commercial bank assets are divided into several categories: corporate loans, retail loans, bond investments, interbank assets, and bill discounts, with yields showing a decreasing trend in order. While reducing bill assets, commercial banks have increased allocations to corporate loans and bonds.
City commercial banks, due to strong loan demand, have allocated more to corporate loans. For example, Xi'an Bank saw its corporate loans grow by 60% from 2023 to June 2025 while significantly reducing bills. In the second half of last year, Xi'an Bank's corporate loan yield was 4.89%, while the bill discount yield was just slightly above 1%
Joint-stock banks are facing insufficient credit demand and have increased their allocation of interest rate bonds. In comparison, the yield on interest rate bonds is higher than that of bills, and the capital occupation is lower—government bonds have a risk weight of 0, while local bonds have a risk weight of 10% or 20%.
&#34;There aren't as many good assets now, and it's not the era of scaling up like in previous years. If there are no suitable assets, we won't force investments; capital still needs to be used sparingly,&#34; said a person from the asset-liability department of a joint-stock bank's headquarters to Jiemian News.
In addition, the disappearance of some arbitrage chains has also led to a decline in the balance of bill discounts. A person from the asset-liability department of a joint-stock bank in a western province introduced to Jiemian News that previously, some branches guided enterprises to open bills for discounting after depositing margin or certificates of deposit to increase deposits and meet assessment targets, and then made several transactions to boost deposits, which would also increase loans as bills were counted as loans. Enterprises also profited because after manually supplementing interest, the deposit interest rate was high, and even after deducting the discount interest, there was still profit. However, now manual interest supplementation is not allowed, making it impossible to balance the accounts, leading to a decline in bill balances.
The so-called &#34;manual interest supplementation&#34; refers to banks privately providing customers with additional interest on deposits, resulting in customers' actual yield being higher than the listed rate. Since April 2024, regulatory authorities have been rectifying &#34;manual interest supplementation,&#34; and many arbitrage structures have been &#34;eliminated.&#34;
<h3>The Diminishing Function of Bills to &#34;Boost Volume&#34;</h3>
In practice, bill discounts are counted towards credit scale, and with active trading in the secondary market and ease of buying and selling, commercial banks have derived operations to adjust credit scale using bills. When credit issuance is poor and banks need to meet credit tasks, they often &#34;buy bills&#34; through transfer discounts or increase direct discounts to &#34;boost scale&#34; and quickly meet regulatory indicators. This has led to a continuous increase in the balance of commercial banks' bill discounts in the past.
However, after 2023, due to a sharp decline in financing demand from real estate and financing platforms, credit demand has become inconsistent, and regulatory authorities have begun to downplay credit growth requirements.
People's Bank of China Governor Pan Gongsheng stated at the Lujiazui Forum in June 2024 that when the growth of monetary credit has shifted from supply constraints to demand constraints, if the focus remains on quantity growth or even has a &#34;scale complex,&#34; it clearly contradicts the laws of economic operation.
In this context, commercial banks no longer need to boost volume through bills. &#34;The current goal of bill business is to return to its essence, just to meet the real needs of customers, and there is no longer a need to use bills to boost scale,&#34; said a person from the asset-liability department of a joint-stock bank's headquarters to Jiemian News.
However, some banks, especially the four major banks, still see their bill discount balances grow against the trend. According to statistics from Jiemian News, from 2023 to June 2025, the bill discount balance of China Construction Bank (601939.SH), Bank of China (601988.SH), and Industrial and Commercial Bank of China (601398.SH) increased by about 60%.
It is worth noting that the bill discount yield of state-owned large banks is also lower than the cost of liabilities, and their bill business is equivalent to &#34;losing money to gain exposure.&#34; The reason for this is that state-owned large banks are positioned as the main force and ballast for serving the real economy, and their credit issuance still needs to maintain a certain growth rate. In the context of insufficient credit demand, growth through bills can promote credit growth
&#34;When there is insufficient effective financing demand, large banks need to increase their support for the real economy in the short term. However, with insufficient project reserves, they can only increase the direct discounting and rediscounting of bills, converting undiscounted bills that represent corporate credit into on-balance-sheet bill financing that represents bank credit,&#34; an industry expert told Jiemian News. &#34;This also provides tangible financial support for enterprises. As bill interest rates decline, the cost of bill financing for small and medium-sized enterprises will also decrease accordingly, which can stimulate financing demand.&#34;

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In 2023, the bill assets of small and medium-sized banks were significantly reduced, with some banks reducing by more than 50%. Regulatory policies and declining yields are the main driving factors. In contrast, the bill assets of the four major banks increased against the trend, indicating different market strategies. The changes in bill assets reflect adjustments in banks' credit strategies, as bills that were once considered "hot commodities" are no longer favored

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"The hot cake" is no longer, bills "fall out of favor": small and medium-sized banks are crowding to reduce, while the four major banks are increasing their positions against the trend