--- title: "Led by the Big Four, Banks See a Surge in Tier 2 Capital and Perpetual Bond Issuance in Q2" type: "News" locale: "en" url: "https://longbridge.com/en/news/288070980.md" description: "After a rare lull in the first quarter, the banking sector's market for Tier 2 capital bonds and perpetual bonds heated up rapidly in the second quarter. Wind data shows that in the second quarter of this year, commercial banks" datetime: "2026-05-29T12:48:53.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/288070980.md) - [en](https://longbridge.com/en/news/288070980.md) - [zh-HK](https://longbridge.com/zh-HK/news/288070980.md) --- # Led by the Big Four, Banks See a Surge in Tier 2 Capital and Perpetual Bond Issuance in Q2 After a rare lull in the first quarter, the banking sector's market for "Tier 2 capital bonds and perpetual bonds" heated up rapidly in the second quarter. Wind data shows that in the second quarter of this year, commercial banks issued a total of 20 Tier 2 capital bonds and perpetual bonds, with a combined issuance scale reaching RMB 596 billion; In contrast, during the first quarter, the issuance scale for these bonds across the entire market was zero, creating a temporary window of inactivity. **In terms of issuers, this round of issuance surge exhibits a clear concentration among top-tier institutions—ICBC, ABC, Bank of China, and CCB, the four state-owned large banks, became the absolute main force, with a combined issuance scale exceeding RMB 350 billion, accounting for nearly 60% of the total issuance scale.** Tier 2 capital bonds and perpetual bonds are important tools for commercial banks to replenish capital; Tier 2 capital bonds can supplement Tier 2 capital, while perpetual bonds can supplement Additional Tier 1 capital; Compared with equity financing methods such as private placements and rights issues, these bonds do not directly dilute shareholders' equity, making them an important channel for external capital replenishment for banks over the long term. Consequently, the financing scale of nearly RMB 600 billion in the second quarter alone has become a significant move for bank capital replenishment this year. **Behind this change reflects the persistent demand for capital replenishment by commercial banks.** In recent years, against the backdrop of serving the real economy and supporting financing in key areas, the scale of bank credit assets has continued to expand, increasing pressure on capital consumption; meanwhile, the net interest margin in the banking industry has remained at a low level, and slowing profit growth has also weakened the ability to replenish capital internally through retained earnings to some extent. Data from the National Financial Regulatory Administration shows that as of the end of the first quarter of 2026, the average capital adequacy ratio of commercial banks was 15.28%, a decrease of 0.18 percentage points from the end of the previous quarter; the Tier 1 Capital Ratio was 12.18%, a decrease of 0.14 percentage points from the end of the previous quarter; and the Core Tier 1 Capital Ratio was 10.70%, a decrease of 0.05 percentage points from the end of the previous quarter. **Although the overall level remains above regulatory requirements, the industry's capital adequacy ratios have shown consecutive marginal declines.** In this context, issuing Tier 2 capital bonds and perpetual bonds to supplement supplementary capital has become an important choice for banks to maintain adequate capital levels. For the four major state-owned banks, this demand is even more prominent. On one hand, as a key force in credit extension, their asset size and risk-weighted assets continue to grow, leading to continuous capital consumption; on the other hand, as Global Systemically Important Banks (G-SIBs), the Big Four must also meet higher-level regulatory requirements such as Total Loss-Absorbing Capacity (TLAC). Compared with equity financing, the issuance cycle for these bonds is shorter, financing costs are relatively controllable, and existing shareholders' shareholding ratios are not affected, making them an important tool for large banks to replenish capital. By issuing perpetual bonds and Tier 2 capital bonds, banks can increase their capital adequacy ratios in a short period, creating space for subsequent credit extension and business expansion. It is worth noting that the timing of this issuance surge coincides with the intensive implementation phase of capital replenishment for state-owned large banks. Since the beginning of this year, the Ministry of Finance has successively advanced capital increase plans for state-owned large commercial banks, focusing on replenishing Core Tier 1 capital, while the Additional Tier 1 capital and Tier 2 capital corresponding to these bonds have become an important supplementary source for banks to optimize their capital structure. **From the perspective of market demand, these bonds remain highly attractive.** In the current low-interest-rate environment, the supply of high-grade credit bonds is relatively limited, and the market generally faces a scarcity of high-quality assets. These bonds, backed by the credit of large banks, offer both high safety and certain yield advantages, making them an important allocation target for institutional investors such as wealth management subsidiaries, public funds, and insurance funds. In particular, those issued by state-owned large banks, due to their lower credit risk and better liquidity, have long been important allocation varieties in the bond market. Looking ahead, influenced by multiple factors such as credit expansion, capital regulation, and pressure on profit growth, the demand for capital replenishment in the banking industry is expected to continue. As the Big Four take the lead in completing large-scale financing, some joint-stock banks, as well as city commercial banks and rural commercial banks with relatively stronger capital constraints, may follow suit. ### Related Stocks - [ACGBY.US](https://longbridge.com/en/quote/ACGBY.US.md) - [601939.CN](https://longbridge.com/en/quote/601939.CN.md) - [601398.CN](https://longbridge.com/en/quote/601398.CN.md) - [00939.HK](https://longbridge.com/en/quote/00939.HK.md) - [601288.CN](https://longbridge.com/en/quote/601288.CN.md) - [601988.CN](https://longbridge.com/en/quote/601988.CN.md) - [01288.HK](https://longbridge.com/en/quote/01288.HK.md) - [IDCBY.US](https://longbridge.com/en/quote/IDCBY.US.md) - [BACHY.US](https://longbridge.com/en/quote/BACHY.US.md) - [CICHY.US](https://longbridge.com/en/quote/CICHY.US.md) - [03988.HK](https://longbridge.com/en/quote/03988.HK.md) - [01398.HK](https://longbridge.com/en/quote/01398.HK.md) - [512820.CN](https://longbridge.com/en/quote/512820.CN.md) - [517900.CN](https://longbridge.com/en/quote/517900.CN.md) - [512700.CN](https://longbridge.com/en/quote/512700.CN.md) - [159887.CN](https://longbridge.com/en/quote/159887.CN.md) - [516210.CN](https://longbridge.com/en/quote/516210.CN.md) - [515020.CN](https://longbridge.com/en/quote/515020.CN.md) - [510650.CN](https://longbridge.com/en/quote/510650.CN.md) - [512800.CN](https://longbridge.com/en/quote/512800.CN.md) - [02388.HK](https://longbridge.com/en/quote/02388.HK.md) ## Related News & Research - [China Construction Bank (CICHF) Receives a Buy from Goldman Sachs](https://longbridge.com/en/news/285000931.md) - [Standard Chartered Executes First China Bond Futures Trade](https://longbridge.com/en/news/287892450.md) - [HSBC tells workers not to resist AI changes](https://longbridge.com/en/news/287094017.md) - [Assessing Bank Of China (SEHK:3988) Valuation After Q1 2026 Earnings And Preferred Dividend Updates](https://longbridge.com/en/news/285569135.md) - [China's ICBC, world's biggest bank, posts 1% profit rise in 2025](https://longbridge.com/en/news/280754488.md)