China’s banks are on the hunt for capital, despite the country having the highest number of representatives in the 2019 Top 1000 World Banks ranking. The 'big five' state-owned banks – Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC), Bank of China (BoC) and Bank of Communications – are the highest ranked in China in terms of Tier 1 capital, but they are all facing a range of pressures on their liquidity.
As it looks to boost gross domestic product (GDP) growth, the government is leaning on banks to increase lending, particularly to smaller and medium-sized companies. But the spectre of shadow banking continues to have an impact on balance sheets, as steps by the regulator to curb the sector have resulted in smaller companies suffering from a lack of credit. Their slowdown has, in turn, had an impact on Chinese GDP growth.
