On October 21, a reporter from China News Service in Beijing reported on the first batch of cooperative banks participating in China’s stock repurchase and increase loan initiative. The banks include major state-owned enterprises like Bank of China, Industrial and Commercial Bank of China, and China Construction Bank, along with two joint-stock banks, China Merchants Bank and CITIC Bank. This initiative encompasses listed companies from various ownership structures across the main board, the Sci-Tech Innovation Board, and the Growth Enterprise Market.
The People’s Bank of China had previously announced the establishment of stock repurchase and increase refinancing to encourage financial institutions to provide loans to eligible listed companies and major shareholders, supporting their efforts to repurchase and increase shares.
As of October 20, 23 companies listed on the Shanghai and Shenzhen stock exchanges had disclosed announcements confirming that either the company or its controlling shareholders reached preliminary agreements or secured loan commitment letters from banks. The total amount involved exceeds 10 billion yuan.
Multiple commercial banks are reportedly developing specialized loan schemes for repurchase and increase in funding. This includes aspects such as customer access, account management, due diligence approval, and risk control, while actively marketing these loan offerings.
These banks have expressed their commitment to effectively utilize the central bank’s policy tools that support the stable development of the capital market. They are enhancing communication with listed companies and their shareholders to reinforce market stability. Several listed companies are already actively applying for repurchase and increase loans, with more announcements expected soon.
For instance, Bank of China stated that on October 19, it signed loan agreements for stock repurchase and increase with six companies, including Sinopec, COSCO Shipping Energy, and others. So far, the bank has reached cooperative intentions with nearly 100 listed companies, providing clear loan commitments to 32 companies across various sectors such as integrated circuits, transportation, high-end manufacturing, and commercial services.
China Merchants Bank disclosed that among its first batch of stock repurchase and increase loan clients, it included both loans for company repurchases and for major shareholders’ increments. The clients comprise both central and state-owned enterprises and high-quality private enterprises, including but not limited to China Merchants Port, China Merchants Shekou, China Merchants Energy, Sinotrans, Weimasi, and Fusa Technology. These initiatives aim to empower listed companies to utilize repurchases and shareholder increments as tools for market value management, further stabilizing the capital market and boosting investor confidence.
