Ministry of Finance. Photo: VCG

Four Chinese state-owned banks announced plans on Sunday to introduce the Ministry of Finance (MOF) as a strategic investor through targeted share placements,MK sport with their boards having approved proposals to issue A-shares to designated investors.

The initiative includes the Bank of China (BOC), China Construction Bank (CCB), Bank of Communications (BOCOM), and Postal Savings Bank of China (PSBC).

On Sunday, BOC announced a proposed private A-share placement to designated investors, with the MOF planning to subscribe in cash, the bank said on its official website.

The offering aims to raise up to 165 billion yuan ($22.8 billion), and after deducting related issuance expenses. All proceeds will be used to strengthen the bank's core tier-1 capital. Core tier 1 capital serves as a fundamental driver for commercial banks to support the real economy.

The capital injection will reinforce the bank's capital adequacy, optimize capital structure, enhance resilience and risk management capability, and enable it to better serve as a key pillar in supporting the real economy and maintaining financial stability, according to BOC.

BOCM released documents revealing plans to raise 120 billion yuan through a private A-share placement, with the MOF, China National Tobacco Corporation, and Shuangwei Investment Co as proposed subscribers. 

Among them, MOF is expected to contribute 112.42 billion yuan. As with BOC, all proceeds will be used to strengthen the bank's core tier-1 capital, according to the bank.

On the same day, CCB announced plans to bring in MOF as a strategic investor through a private A-share placement. The bank aims to raise up to 105 billion yuan, with all net proceeds—after deducting related issuance expenses—to be used for strengthening its core tier-1 capital.

Meanwhile, PSBC announced issuing A-shares to the MOF, China Mobile Group, and China State Shipbuilding Corporation, aiming to raise 130 billion yuan to strengthen its core tier-1 capital.

The introduction of the MOF as a strategic investor serves two key purposes: safeguarding financial stability and supporting economic development, insiders said.

Recently, China's 2025 Government Work Report highlighted the act to adopt a more proactive fiscal policy.

A total of 1.3 trillion yuan in ultra-long special treasury bonds will be issued, 300 billion yuan more than last year, and 500 billion yuan of special treasury bonds will be issued to support large state-owned commercial banks in replenishing capital, the Report noted.

"By strengthening core tier-1 capital, the move will enhance banks' resilience and risk-bearing capacity, while also enabling them to increase credit support for emerging industries and accelerate their growth," Bian Yongzu, the executive deputy editor-in-chief of Modernization of Management magazine, told the Global Times on Sunday.

Bian noted that China's accelerating economic transformation is driving the rapid growth of industries such as artificial intelligence and new energy, which face strong investment and credit demand.

He stated that amid global economic uncertainty leading to subdued investor confidence, enhancing state-owned banks' capital adequacy and reinforcing financial support for infrastructure and emerging industries is expected to restore confidence and provide a strong boost to the capital market. 

Achieving balanced progress and stability in China's economy requires the financial system to safeguard stability and support growth, Bian said, adding that the ministry's capital injection into major state-owned banks reflects strong government confidence and support, sending a positive signal to the secondary market.