Old for New: Banks Rush to Redeem Preferred Shares

Bank Jiangsu has announced plans to fully redeem 200 million "Subin Preferred 1" preferred shares, which entered countdown to redemption, on November 30. The city commercial bank will redeem the capital instruments issued in 2017 at par value plus declared but unpaid dividends for the current period. This is not an isolated case. According to Wind data, five listed banks, including China Everbright Bank, Ping An Bank, China Merchants Bank, Bank of Beijing and Bank of Nanjing, have completed preferred share redemptions so far this year, and CITIC Bank will redeem 350 million preferred shares issued in 2016 on October 26. Against a backdrop of low interest rates, a "portfolio swap" involving other Tier 1 capital instruments is quietly unfolding. (China Securities Journal)