Core Viewpoint - The article discusses the evolution of capital management tools in commercial banks, highlighting the shift from preferred shares to perpetual bonds as the primary means of capital supplementation due to changing market conditions and financial strategies [2][5][7]. Group 1: Preferred Shares Redemption - Recently, A-share listed banks have initiated a wave of preferred share redemptions, with Industrial Bank announcing the redemption of all its preferred shares totaling 56 billion yuan [2][3]. - The trend indicates that banks are moving away from issuing preferred shares as a primary capital supplement, despite their historical popularity [2][5]. - The high dividend rates of previously issued preferred shares are becoming less attractive in the current low-interest-rate environment, prompting banks to seek more cost-effective alternatives [4][5]. Group 2: Cost Savings and Financial Management - Industrial Bank's decision to redeem its preferred shares was influenced by the high financial costs associated with maintaining these shares, with expected dividend payments of 2.597 billion yuan in 2024 [3][4]. - The shift towards redeeming preferred shares is also driven by the lower costs associated with issuing perpetual bonds, which can save banks significant financial resources [3][5]. - Analysts suggest that banks can achieve substantial savings by redeeming preferred shares and issuing perpetual bonds instead, as the latter has a much lower issuance cost [3][5]. Group 3: Capital Management Strategies - The average core Tier 1 capital adequacy ratio for commercial banks was reported at 10.7% as of the first quarter of 2025, with many banks falling below this average [7]. - Banks are increasingly focusing on capital management strategies that prioritize reducing risk-weighted assets and enhancing asset returns, particularly in light of current profitability pressures [7][8]. - The implementation of advanced capital measurement methods poses additional challenges for banks, requiring them to adapt their risk-weighted asset calculations to meet regulatory standards [8].