China’s Biggest Banks Face $940 Billion Capital Shortage by 2024
- Banks face 2025 deadline to meet global capital requirements
- Chinese banks are seeing earnings eroded by pandemic
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China’s four largest lenders are facing a funding gap in the trillions of yuan to meet global capital requirements designed to protect the public and the financial system against massive bank failures, according to S&P Global Ratings.
Industrial and Commercial Bank of China Ltd., Bank of China Ltd., China Construction Bank Corp. and Agricultural Bank of China Ltd., all considered globally-systematically important banks, last year had a total shortage of 2.25 trillion yuan ($323 billion) to comply with the total-loss absorbing capacity, S&P said in a report on Wednesday. The may grow to as much as 6.51 trillion yuan by 2024 as the pandemic erodes their earnings capacity, the ratings firm said.