Zheng Quan Ri Bao·2025-09-23 00:52Core Viewpoint - Recent announcements from multiple banks regarding the redemption of subordinated capital bonds and perpetual bonds indicate a strategic response to changing interest rates, regulatory requirements, and capital management needs. The "perpetual bonds" will continue to be an important tool for capital replenishment in the banking sector [1][2]. Group 1: Reasons for Redemption - Several banks, including China Construction Bank and Qilu Bank, have recently redeemed their "perpetual bonds" due to three main reasons: lowering capital costs, enhancing market reputation, and specific bond terms that allow for redemption after five years [2][3]. - The decline in interest rates allows banks to redeem high-cost old bonds and issue new ones at lower rates, effectively reducing interest expenses and alleviating net interest margin pressure [3]. Group 2: Capital Management and Regulatory Compliance - The implementation of new capital management regulations has led to stricter counter-cyclical capital supervision, particularly for globally systemically important banks, necessitating the replacement of old bonds to optimize capital structure and improve capital tool adaptability [3][6]. - Redemption of old bonds may temporarily decrease a bank's capital scale, but if new bonds are issued simultaneously, it can enhance capital replenishment efficiency [3][4]. Group 3: Market Dynamics and Future Trends - The demand for capital replenishment in the banking sector remains urgent due to significant credit needs during economic transformation and the necessity for capital buffers in dealing with non-performing assets [5]. - The issuance of "perpetual bonds" is expected to show a divergence trend, with large banks and quality joint-stock banks likely to continue leveraging the interest rate decline to accelerate the redemption and issuance of new bonds, while smaller banks may face increased challenges in issuing new bonds [6].