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Eight Chinese Banks Redeem $25.5B Preferred Shares, Topping All of 2025

Eight Chinese banks have announced the redemption of preferred shares totaling 185.5 billion yuan ($25.5 billion) since the start of 2026, exceeding the full-year redemption volume for domestic banks in 2025. The banks are redeeming higher-cost preferred stock and replacing it with lower-rate perpetual bonds as issuance costs fall and large volumes of preferred shares enter their callable windows, industry participants said.

Original source

AI take

The scale here is the story: redemptions in the early part of 2026 already outpacing all of 2025 points to a structural shift in how Chinese banks manage their capital stack, not a one-off. Swapping preferred stock for perpetual bonds lowers funding costs, which matters for bank profitability and, indirectly, for the credit backdrop that RWA and yield-seeking crypto products increasingly track. The concentration of callable windows suggests more of this is queued up. Whether the pace of perpetual bond issuance keeps matching redemptions — and whether spreads stay tight enough to justify the trade — is the open question.

Generated by AI for reference only.

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