China to start re-capitalizing banks with $55 billion

26/2/2025 16:46

China plans to inject at least 400 billion yuan into its biggest banks in coming months as part of a broader stimulus package to revive growth in the economy, Bloomberg News reported on Wednesday.



The first batch of banks include Agricultural Bank of China and Bank of Communications, Bloomberg said, citing unidentified people familiar with the matter.

The plan, which could be completed as soon as the end of June, is subject to change and the amount for each bank is still being finalized.



Chinese banks are being squeezed by sluggish credit demand and cuts to interest rates to support sputtering growth, along with a slew of bad loans compounded by a years-long property sector crisis.



The government pledged late last year to increase capital at the country's six major banks, but did not give many details. Supporting the group that has a combined $1 trillion market capitalisation is a critical part of Beijing's stimulus efforts.