Core Viewpoint - The Financial Stability Board (FSB) has released the 2025 Global Systemically Important Banks (G-SIBs) list, with five major Chinese banks included, and the Industrial and Commercial Bank of China (ICBC) has been upgraded from Group 2 to Group 3 [4][5]. Group 1: G-SIBs List and Rankings - Five major Chinese banks, including ICBC, Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of Communications, are included in the 2025 G-SIBs list [5]. - ICBC's capital requirement has increased by 0.5 percentage points due to its upgrade to Group 3, raising its additional capital requirement from 1.5% to 2% [5]. - Other four major banks maintain their additional capital requirements at 1.5%, while Bank of Communications remains at 1% [5]. Group 2: Score Changes and Future Prospects - The scores of the five major banks have increased by 9 to 33 points, indicating a potential for Bank of China to be upgraded in the future [5]. - ICBC and Bank of China scored above 300 points, with ICBC's score rising by 33 points to 332 and Bank of China's by 32 points to 314, just 16 points away from the Group 3 threshold [5]. - Agricultural Bank of China and China Construction Bank scored 272 and 259 points respectively, with stable group expectations in the short term [5]. - Bank of Communications scored 138 points, an increase of 9 points, remaining in Group 1 [5]. Group 3: Potential for Other Banks - The likelihood of China Merchants Bank entering the G-SIBs list has significantly increased, with its score rising by 19 points to 122, just 8 points shy of Group 1 [6]. - Other banks such as Industrial Bank and CITIC Bank have maintained stable scores, while Shanghai Pudong Development Bank's score has remained unchanged [6]. Group 4: Capital Adequacy and Regulatory Compliance - After the upgrade, ICBC's core Tier 1 capital adequacy ratio requirement increases to 9.5%, while its actual ratio stands at 13.6%, providing a buffer of 4.1 percentage points [7]. - All major banks meet the G-SIBs regulatory requirements, with safety margins ranging from 0.8 to 5.4 percentage points [7]. - The total loss-absorbing capacity (TLAC) requirements are also being met, with ICBC's total capital adequacy ratio at 19%, exceeding the required thresholds [7].

Core Viewpoint - The 2025 Global Systemically Important Banks (G-SIBs) list has been released, with five Chinese banks maintaining their status. The Industrial and Commercial Bank of China (ICBC) has moved up to the third group, marking a significant achievement for Chinese financial institutions [3][5]. Group 1: G-SIBs List and Rankings - The latest G-SIBs list includes 29 institutions, consistent with 2024, but with changes in scores and groupings for some banks [5]. - ICBC has advanced from the second group to the third group, becoming the first Chinese bank in this category. Other Chinese banks, including Bank of China, Agricultural Bank of China, and China Construction Bank, remain in the second group, while Bank of Communications stays in the first group [5][6]. - The G-SIBs list is divided into five groups, with the highest group (fifth) having no institutions, and the fourth group containing only JPMorgan Chase [5]. Group 2: Scoring Changes and Influencing Factors - This year, the scoring changes for Chinese G-SIBs show two main characteristics: scale is no longer the primary driver for score increases, and exchange rate fluctuations have had a positive impact [6][7]. - For instance, ICBC and Bank of China saw significant score increases of 33 and 32 points, respectively, due to various contributing factors [6]. - Despite these changes, Chinese G-SIBs still outperform global peers in terms of scale and interconnectedness [6]. Group 3: TLAC Compliance and Issuance - Following the successful achievement of the first phase of Total Loss-Absorbing Capacity (TLAC) requirements, the pressure for compliance in the next phase remains a concern [10][11]. - The five major banks have issued over 300 billion yuan in TLAC non-capital bonds this year, with a cumulative issuance of 540 billion yuan [11][12]. - The TLAC non-capital bonds are crucial for meeting international G-SIBs requirements, and the regulatory capital remains the primary component of total loss-absorbing capacity [12]. Group 4: Future Compliance Outlook - Some banks are currently able to meet the next phase of TLAC requirements, while others may need government support to achieve compliance [13]. - The assessment indicates that if risk-weighted asset growth remains stable, all five major banks are expected to meet the upcoming TLAC requirements on schedule [13].

Group 1: Core Insights - The 2025 Global Systemically Important Banks (G-SIBs) list has been released, with Chinese banks maintaining the same number of five institutions as the previous year, but with the Industrial and Commercial Bank of China (ICBC) moving up to the third group, becoming the first Chinese bank in this category [1][2] - The assessment framework for G-SIBs includes five weighted dimensions: size, interconnectedness, substitutability, complexity, and cross-border activity, with 13 secondary indicators used for a comprehensive evaluation [3] - Fitch Ratings noted that the scoring changes for Chinese G-SIBs this year are driven less by size and more by exchange rate effects, which have historically alleviated upward pressure on scores [3][4] Group 2: TLAC and Regulatory Requirements - Following the successful achievement of the first phase of Total Loss-Absorbing Capacity (TLAC) requirements, the pressure for the next phase remains a concern, with the issuance of TLAC non-capital bonds exceeding 300 billion yuan this year, totaling 540 billion yuan cumulatively [1][7] - The G-SIBs face higher core capital and TLAC regulatory requirements, with specific targets set for 2025 and 2028, including a TLAC risk-weighted ratio of at least 16% and 18% respectively [6][9] - As of Q1 2025, the four major banks have exceeded the minimum TLAC/RWA requirement of 20%, but the second phase compliance is still under scrutiny, with some banks needing additional capital to meet the requirements [7][9] Group 3: Market Dynamics and Future Outlook - The issuance of TLAC non-capital bonds has been a significant tool for G-SIBs to meet their total loss-absorbing capacity requirements, with the major banks having issued multiple tranches since last year [7][8] - Fitch Ratings anticipates that while some banks can meet the next phase of TLAC requirements, others may need government capital injections to alleviate pressure on their total loss-absorbing capacity [9] - The report indicates that if risk-weighted asset growth remains stable, the major banks are likely to meet the upcoming TLAC requirements on schedule [9]

Core Insights - The Financial Stability Board (FSB) has updated the list of Global Systemically Important Banks (G-SIBs) for 2025, highlighting the advancement of Chinese banks in the global financial system [1][2] - Five major state-owned banks from China have been recognized, with Industrial and Commercial Bank of China (ICBC) moving from the second group to the third group, marking it as the first Chinese bank to achieve this status [1][2] Group 1: ICBC's Advancement - ICBC's elevation to the third group reflects its ongoing efforts in smart risk control, modern layout, digital empowerment, comprehensive services, and ecological systems [2] - External factors such as changes in international competition and currency fluctuations contributed to ICBC's rise, with the appreciation of the Renminbi against the Euro positively impacting its score [2] Group 2: Implications for Chinese Banking Sector - The elevation of ICBC signifies a notable increase in the systemic importance of Chinese banks within the global financial framework [3] - This event sends three key signals: the enhanced global significance of Chinese banks, a shift in competitive focus towards emerging markets, and the potential reshaping of the global banking landscape [3] - ICBC's advancement is expected to have a demonstration effect on other large domestic banks, promoting adherence to global regulatory standards and encouraging a transition from "scale expansion" to "quality expansion" in the Chinese banking sector [3]

Core Points - The Financial Stability Board (FSB) released the 2025 list of Global Systemically Important Banks (G-SIBs) on November 27, 2023, with five major state-owned banks from China consistently included in the list [1] - Industrial and Commercial Bank of China (ICBC) has moved from the second group to the third group, while Agricultural Bank of China, Bank of China, and China Construction Bank remain in the second group, and Bank of Communications stays in the first group [1] Group 1: G-SIBs Classification and Requirements - The G-SIBs rating is based on five dimensions: size, interconnectedness, substitutability, financial institution infrastructure, complexity, and cross-border activities [4] - The 2025 list includes 29 G-SIBs, with the same institutions as in 2024 but with adjusted rankings reflecting changes in banks' core business activities [4] - An increase in group ranking leads to higher loss absorption requirements, effective from January 1, 2027 [4][5] Group 2: Capital Requirements and TLAC - Following the group elevation, ICBC's additional capital requirement will rise from 1.5% to 2.0% [5] - The total loss-absorbing capacity (TLAC) requirements for G-SIBs are aligned with international standards, with external TLAC risk-weighted ratios set to be no less than 16% from January 1, 2025, and 18% from January 1, 2028 [6] - TLAC bonds issued by the five major state-owned banks reached a total of 540 billion yuan, with 30 bonds issued as of November 28, 2025 [7]

Core Points - The Financial Stability Board (FSB) released the 2025 list of Global Systemically Important Banks (G-SIBs) on November 27, 2023, with five major state-owned banks from China consistently included in the list [1] - Industrial and Commercial Bank of China (ICBC) has moved from the second group to the third group, while Agricultural Bank of China, Bank of China, and China Construction Bank remain in the second group, and Bank of Communications stays in the first group [1][2] Group 1: G-SIBs Classification and Capital Requirements - The G-SIBs classification is based on five dimensions: size, interconnectedness, substitutability, financial institution infrastructure, complexity, and cross-border activities [2] - The 2025 list includes 29 G-SIBs, with the same institutions as in 2024 but with adjusted rankings reflecting changes in banks' core business activities [2] - ICBC's additional capital requirement will increase from 1.5% to 2.0% due to its group elevation, effective from January 1, 2027 [2][3] Group 2: Factors Influencing G-SIBs Scores - The increase in scores for ICBC and Bank of China by 33 and 32 points, respectively, is attributed to multiple sub-factors rather than size being the primary driver [3] - Chinese G-SIBs continue to outperform global peers in terms of size and interconnectedness metrics [3] - Currency fluctuations have positively impacted the scores of Chinese G-SIBs, contrasting with historical trends where currency factors typically alleviated score increases [3] Group 3: TLAC Requirements and Bond Issuance - G-SIBs must meet different capital requirements based on their group classification and adhere to Total Loss-Absorbing Capacity (TLAC) requirements [4] - TLAC is designed to ensure that G-SIBs can absorb losses and maintain critical functions during resolution [4] - As of November 28, 2025, the five major state-owned banks have issued a total of 30 TLAC bonds amounting to 540 billion yuan [5] - The issuance of TLAC bonds from 2024 to 2025 is expected to be lower than anticipated, with a projected net supply of around 300 billion yuan in 2026 [5]

Core Viewpoint - The issuance of TLAC bonds by major state-owned banks in China has reached a total scale of 250 billion yuan this year, reflecting compliance with regulatory requirements for total loss-absorbing capacity [1][2][3]. Group 1: TLAC Bond Issuance - Major state-owned banks, including Bank of China, Agricultural Bank of China, and others, have issued TLAC bonds totaling 250 billion yuan this year, surpassing last year's issuance [2]. - The total issuance of TLAC bonds in the market has reached 480 billion yuan this year, with the five major banks receiving approval for a total of 440 billion yuan in TLAC debt instruments [2][3]. - Bank of China issued a 500 billion yuan TLAC bond with a fixed interest rate of 1.93% for a four-year term, aimed at enhancing its total loss-absorbing capacity [1]. Group 2: Compliance with Regulatory Requirements - The four major state-owned banks have successfully met the first phase of TLAC requirements, with their TLAC/RWA ratios exceeding the minimum requirement of 20% as of Q1 2025 [3]. - According to Fitch Ratings, the TLAC/RWA ratios for these banks need to reach 20% and 22% by 2025 and 2028, respectively, with specific targets for each bank [2][3]. - Agricultural Bank of China and Bank of China have TLAC/RWA ratios of 20.5% and 20.7%, respectively, indicating compliance with regulatory standards [3]. Group 3: Innovation in TLAC Bonds - The issuance of floating-rate TLAC bonds by Bank of Communications represents an innovative approach, with a total issuance of 300 billion yuan, including both fixed and floating-rate options [3][4]. - The floating-rate TLAC bond has a subscription rate of 1.42 times, indicating strong market interest and recognition of its investment value [4]. - The floating-rate bond's structure allows for effective hedging against interest rate risks, providing investors with a stable income stream [4].

Core Viewpoint - China Bank successfully issued "2025 Total Loss Absorption Capacity Non-Capital Bonds (Second Phase)" with a total issuance scale of 50 billion RMB, reflecting strong investor confidence in the bank's credit strength [1] Group 1: Bond Issuance Details - The bond has a fixed interest rate of 1.93% and a maturity period of 4 years, with a redemption option for the issuer at the end of the third year [1] - The funds raised will be used to enhance the bank's Total Loss Absorption Capacity (TLAC) to meet regulatory requirements for globally systemically important banks [1] Group 2: Market Response - The issuance was led by Bank of China International Securities, with participation from major banks such as Industrial and Commercial Bank of China, Agricultural Bank of China, and China Construction Bank, along with securities firms like CITIC Securities and Huatai Securities [1] - The bond was oversubscribed by 20 billion RMB, indicating strong market demand and investor recognition of China Bank's creditworthiness [1]

Core Viewpoint - The issuance of Total Loss-Absorbing Capacity (TLAC) bonds by China's globally systemically important banks (G-SIBs) is a proactive measure to enhance their loss absorption capabilities and align with international regulatory standards [1][3][6] Group 1: TLAC Bond Issuance - Three out of five G-SIBs in China have issued TLAC non-capital bonds to improve their total loss-absorbing capacity [1] - The first bank to issue TLAC bonds in 2025 was Bank of Communications, followed by Agricultural Bank of China and Bank of China, with respective issuance amounts of RMB 300 billion, RMB 500 billion, and RMB 400 billion [2] - The approved issuance limits for the banks are RMB 600 billion for Industrial and Commercial Bank of China, RMB 1800 billion for Agricultural Bank of China, RMB 1500 billion for Bank of China, and RMB 3000 billion for Bank of Communications [2] Group 2: Regulatory Framework and Compliance - The People's Bank of China, along with other regulatory bodies, established a TLAC regulatory framework in October 2021, requiring G-SIBs to meet specific external TLAC ratio requirements by early 2025 and 2028 [4] - Banks are encouraged to develop detailed timelines and strategies for achieving TLAC compliance, alongside optimizing capital management [4][5] Group 3: Market Impact and Strategic Importance - The issuance of TLAC bonds is seen as a milestone for China's financial system, enhancing the banks' capital and risk management capabilities while increasing the variety of credit bonds available in the domestic market [5] - Achieving TLAC compliance is viewed as essential for the international development of the five major banks, reflecting their commitment to global financial standards and enhancing China's banking sector's international reputation [6]

Core Viewpoint - The issuance of TLAC non-capital bonds by Chinese global systemically important banks (G-SIBs) is a strategic move to enhance their total loss-absorbing capacity ahead of the 2025 regulatory deadline, thereby improving their risk resilience and international competitiveness [1][2][5]. Group 1: TLAC Non-Capital Bonds - The People's Bank of China and the former China Banking and Insurance Regulatory Commission introduced TLAC non-capital bonds in April 2022 to help G-SIBs meet total loss-absorbing capacity requirements [2]. - TLAC non-capital bonds are designed to absorb losses and do not count as bank capital, making them a crucial tool for financial stability [2][3]. - The first issuance of TLAC non-capital bonds in China will be by Industrial and Commercial Bank of China (ICBC), with a planned issuance scale of RMB 300 billion [2][4]. Group 2: Industry Response and Future Plans - Major state-owned banks, including ICBC, Agricultural Bank of China, Bank of China, China Construction Bank, and Bank of Communications, are preparing to issue TLAC non-capital bonds to meet the upcoming regulatory requirements [4]. - Agricultural Bank of China plans to issue up to RMB 500 billion in TLAC non-capital bonds, while ICBC's issuance is capped at RMB 600 billion [4]. - Analysts believe that the successful issuance of TLAC non-capital bonds will pave the way for a new funding avenue for systemically important banks, allowing them to enhance their capacity to serve the real economy [3][6]. Group 3: Market Conditions and Investor Appeal - The current high capital adequacy ratios of large commercial banks have narrowed the TLAC gap, indicating a favorable environment for the issuance of TLAC non-capital bonds [6]. - TLAC non-capital bonds are attractive to investors due to their higher credit ratings and safety, along with a potential premium on interest rates due to their subordinated nature [5].