Chinese megabanks' buffers bolstered by capital injection

The six megabanks experienced more margin squeeze than peers due to policy-favored lending, said S&P.

China's six largest banks are set to enjoy more lending flexibility and a boost in capital buffers thanks to a new state cash injection.

In particular, Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (ABC) are likely to see a capital injection in 2026, said S&P Global Ratings. The remaining four megabanks were recapitalized last 2025.

"The injection also addresses increased capital requirements stemming from the megabanks' designation as global systemically important banks (G-SIBs)," the ratings agency said in a report published in March 2026.

The six megabanks reportedly experienced more interest margin squeeze than their peers due to their role in policy-favored lending, and in backing China's economic growth.

"The capital injection will help the megabanks to solidify their capital buffer amid profit pressure. The injection will mitigate pressure from weakening internal capital generation," said Xi Cheng, credit analyst for S&P Global Ratings.

Megabanks' policy role is estimated to have contributed to more NIM compression, and a bigger hit on returns on average assets, than those seen  by other Chinese banks between 2023-2025, Cheng said.