Core Viewpoint - The issuance market for secondary capital bonds and perpetual bonds (commonly referred to as "perpetual bonds") by commercial banks has shown a significant recovery in the second quarter compared to the first quarter, although the overall issuance volume and quantity have decreased year-on-year [1][2]. Summary by Relevant Sections Issuance Trends - As of June 3, 2023, a total of 34 perpetual bonds have been issued by commercial banks this year, amounting to 642.16 billion yuan, which represents a year-on-year decrease in both quantity and scale [2]. - In the second quarter, 25 perpetual bonds were issued, with a total issuance scale of 468.3 billion yuan, showing a significant increase from the first quarter [1][2]. Demand Differentiation - There is a noticeable differentiation in demand for perpetual bonds among different types of banks. State-owned large banks have reduced their reliance on perpetual bonds for capital supplementation, leading to a decline in issuance scale [1][3]. - In contrast, small and medium-sized banks are increasing their issuance of perpetual bonds due to lower financing costs, indicating a greater demand for capital supplementation [3]. Capital Adequacy Concerns - The capital adequacy ratios of small and medium-sized banks, such as city commercial banks and rural commercial banks, are under significant pressure, which is reflected in their increased issuance of perpetual bonds [3]. - Data from the National Financial Regulatory Administration shows that the capital adequacy ratios for city commercial banks, private banks, and rural commercial banks are lower compared to state-owned large banks and national joint-stock banks [3]. Regulatory Environment - Since 2025, the approved issuance quota for perpetual bonds has approached one trillion yuan, showing a significant increase compared to the previous year, with many approvals granted to small and medium-sized banks [4]. - The issuance structure is expected to diversify, with state-owned large banks likely to reduce their issuance scale, while national joint-stock banks and city commercial banks may see marginal increases [4].