{"text":[[{"start":7.64,"text":"China is pumping Rmb360bn ($54bn) into its biggest banks and insurers in a bid to prop up the financial sector’s declining margins and create buffers to boost economic growth."}],[{"start":20.72,"text":"Eight institutions including state-run commercial banks ICBC and Agricultural Bank and insurers China Life and China Reinsurance announced they would receive a total of Rmb300bn in fresh equity from the Ministry of Finance and Rmb60bn from state tobacco companies. The ministry will issue special bonds to participate in share placements."}],[{"start":43.28,"text":"ICBC and AgBank aim to raise a combined Rmb260bn and will use the funds to boost their core tier one capital ratios."}],[{"start":52.62,"text":"The capital ratios of Chinese lenders are considered strong, reporting an average capital adequacy ratio of 15.26 per cent and a core tier one ratio of 10.72 per cent as of June."}],[{"start":65.2,"text":"However, low interest rates are weakening their profitability, making it more difficult to boost lending while retaining adequate capital. Low interest rates are also affecting insurers’ long-term investment prospects."}],[{"start":77.5,"text":"Annual pre-tax profits at ICBC, the world’s biggest bank by assets, were almost flat last year at about $63bn."}],[{"start":86.08,"text":"The injection follows a Rmb520bn funding initiative announced last year for the country’s biggest state-owned banks."}],[{"start":93.76,"text":"This year’s plan was originally expected to cover the remaining two of the six large state-owned banks but has been extended to include insurers and other state-controlled lenders."}],[{"start":103.08,"text":"So-called policy lenders Export-Import Bank of China and Sinosure, which are key institutions for China’s importers and exporters, will receive Rmb40bn of the Rmb360bn funding."}],[{"start":116.24,"text":"State insurance groups China Life, PICC, China Taiping and China Re will receive Rmb60bn, according to official statements. This represented the finance ministry’s first large capital boost for the insurance sector in 20 years, analysts said."}],[{"start":131.76,"text":"Cheng Tan, founder of Beijing-based consultancy GMF Research, said the capital injections for the policy banks and state-owned insurers were a surprise, with Beijing broadening the initiative to a “full spectrum” recapitalisation to cover all state-backed financial institutions."}],[{"start":146.4,"text":"“Low interest rates are eating into insurers’ profits and weakening their financial buffers,” said Cheng. “Second, more capital gives them more leeway to put money into stocks, which fits with the broader push to bring long-term institutional money into the market.”"}],[{"start":162.44,"text":"Net interest margins for China’s commercial banks stood at about 1.41 per cent at the end of June, according to official data."}],[{"start":170.48,"text":"The key measure of profitability has been narrowing since 2019 due to interest rate cuts and weak credit demand amid a slowing economy."}],[{"start":178.84,"text":"ICBC vowed to compensate investors whose stakes were diluted by the rights issue for the recapitalisation by improving operating performance."}],[{"start":187.68,"text":"Shares in ICBC and AgBank fell about 2 per cent in Hong Kong on Monday following the announcements."}],[{"start":198.44,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1788773474_5788.mp3"}