China remains committed to supporting megabanks: analyst

The megabanks are expected to expand lending to support “national priorities.”

China is expected to remain highly supportive of its banking system, especially its megabanks, according to S&P Global Ratings.

"China will remain highly supportive of its banking system. This includes the government's proposed capital injections to megabanks amid their increasing support for policy initiatives," said S&P Global Ratings credit analyst Michael Huang.

The government is expected to support these global systemically important banks (G-SIBs), if and when needed, before certain bail-in tools, including Tier-2 bonds, total loss-absorbing capital (TLAC) non-capital bonds, and the Deposit Insurance Fund, to cover losses, according to Huang.

This enhanced capital cushion will likely give the banks more flexibility to fulfill their critical roles to support national priorities, the ratings agency said.

Proposed capital injections from the central government will give China’s megabanks more ability to fund the country’s growth, according to an earlier 2025 report by S&P Global Ratings.

"The injection will enhance the megabanks' capital position to fund loan expansion," S&P Global Ratings credit analyst Xi Cheng had said.