On October 21, a reporter from China News Service learned that several major banks have been approved to participate in the first round of stock repurchase and shareholding loans in China. These include state-owned giants like Bank of China, Industrial and Commercial Bank of China, and China Construction Bank, along with joint-stock banks such as China Merchants Bank and CITIC Bank. The initiative encompasses publicly traded companies across various ownership structures, covering the main board, the Sci-Tech Innovation Board, and the Growth Enterprise Market.
The People’s Bank of China previously announced the establishment of a stock repurchase and shareholding relending scheme, aimed at encouraging financial institutions to provide loans to eligible listed companies and their major shareholders to support stock repurchases and increases in shareholding.
As of October 20, 23 companies listed on the Shanghai and Shenzhen exchanges have disclosed announcements indicating that they or their controlling shareholders have reached intention agreements or obtained loan commitment letters from banks. The total amount involved exceeds 10 billion yuan.
Reports suggest that several commercial banks have developed specialized landing plans for the repurchase and shareholding loans. These plans focus on various aspects, including client access, account management, due diligence approval, and risk control, to enhance internal control systems and actively market the loans.
Commercial banks have made it clear that they will leverage the central bank’s policy tools to support the stable development of the capital market. They plan to strengthen communication with listed companies and shareholders to actively contribute to market stability. Some listed companies have already begun applying for repurchase and shareholding loans, and more announcements are likely to follow.
For instance, Bank of China announced on October 19 that it had signed agreements to provide stock repurchase and shareholding loans to six listed companies, including Sinopec, Cosco Shipping Energy, and others. To date, Bank of China has reached cooperation intentions with nearly 100 listed companies and has confirmed loan commitments to 32 of them, spanning several industries such as integrated circuits, transportation, high-end manufacturing, and commercial services.
China Merchants Bank also revealed that among its first batch of clients for stock repurchase and shareholding loans, there are loans for both company repurchases and major shareholder increases. The client list includes central state-owned enterprises and high-quality private firms, such as China Merchants Port, China Merchants Shekou, China Merchants Energy, and more. This initiative aims to assist listed companies in utilizing tools like repurchases and shareholder increases for market capitalization management, further stabilizing the capital market and boosting investor confidence.
