Feb 26 (Reuters) - China plans to inject at least 400 billion yuan ($55.13 billion) into its biggest banks in the coming months as part of a broader stimulus package to revive economic growth, Bloomberg News reported on Wednesday. The first batch of banks include Agricultural Bank of China (601288.SS) and Bank of Communications (601328.SS) and Bank of Communications (BoCom), Bloomberg said, citing unidentified people familiar with the matter. The plan, which could be completed by the end of June, is subject to change and the amount for each bank is still being finalized. The Ministry of Finance, the National Financial Regulatory Administration, AgBank and BoCom did not immediately respond to Reuters’ request for comment. Chinese banks are under pressure from weak credit demand and interest rate cuts to support slowing growth, as well as a spate of bad loans compounded by a years-long property crisis. The government pledged late last year to increase capital at the country’s six biggest banks, but has not provided many details. The capital injection plan is aimed at supplementing the core Tier 1 capital at the country’s six largest state-owned banks, including Industrial and Commercial Bank of China (601398.SS), AgBank, Bank of China (601988.SS), China Construction Bank (601939.SS), BoCom and China Postal Savings Bank (601658.SS). In total, China could raise 1 trillion yuan through special treasury bonds to inject capital into major state-owned banks, Reuters reported in October. AgBank closed up 2.62% in Hong Kong, and BoCom closed up 2.15%. Supporting the group with a combined market value of $1 trillion, in what would be the first time authorities have recapitalized Chinese banks since the global financial crisis, is a key part of Beijing’s stimulus efforts. Last October, China promised to “significantly increase” debt to revive the economy, including measures that would help local governments deal with their debt problems, provide subsidies to low-income people, support the property market and replenish capital in state-owned banks, among other measures. China also unveiled a 10 trillion yuan debt package to ease local governments’ financing strains and stabilize economic growth. China’s parliament, the National People’s Congress (NPC), will begin its annual session on March 5. Markets and economists are keeping a close eye on the release of more stimulus measures later in the session, expecting targeted measures to boost consumption.

Major Chinese lenders have been struggling with falling net interest margins (NIM) and shrinking profits. The overall NIM for China’s commercial banks fell to a record low of 1.52% in the fourth quarter of last year, official data showed.

($1 = 7.2555 Chinese yuan)

Reporting by Rajveer Singh Pardesi in Bengaluru and Ziyi Tang in Beijing; Editing by Kim Coghill and Shri Navaratnam

Source: Notícias Agrícolas