Smaller banks stung by drop in capital bond sales

Threading caution: People play checkers outside a Baoshang Bank branch in Beijing. Tier-2 notes from the bank were written off in 2020 after it as taken over by Chinese authorities. - Bloomberg

BEIJING: Chinese lenders have been a refuge from the crisis of confidence that gripped banks globally. But a corner of the country’s credit market has been showing that smaller lenders aren’t without some challenges of their own.

The 954 billion yuan (US$139bil or RM612bil) market for capital bonds from China’s city and rural commercial banks started showing strains before the recent collapse of some lenders in the United States and Europe.