Four of China's major state-owned commercial banks on Sunday announced plans to raise a combined 520 billion yuan (about $72.5 billion) through the issuance of A-shares targeting specific investors.

The four commercial banks - Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China - published their plans through statements to the Shanghai Stock Exchange and the Hong Kong Stock Exchange.

Accordingly, Bank of China aims to raise 165 billion yuan, China Construction Bank about 105 billion yuan, Bank of Communications about 120 billion yuan, and Postal Savings Bank of China about 130 billion yuan.

All four banks have said that the raised funds, after deducting issuance-related costs, will be used to replenish their respective core tier-1 capital. The move follows China's top legislature - the National People's Congress, in its government work report, approving the issuance of 500 billion yuan in special government bonds to recapitalize the nation's state-owned banks.

China's Ministry of Finance (MOF) will participate in the fundraising efforts of all four banks, with a combined intended subscription of up to 500 billion yuan. The four banks said that capital replenishment from the MOF is a crucial move from the government to support their stable operations and development. The banks in question reported cumulative net profits totaling around 750 billion yuan last year.

The China Construction Bank said in its statement, "The strategic investment by the MOF in the Bank can optimize the layout of state-owned capital, enhance the transmission efficiency of fiscal policies, strengthen the implementation of national strategies through capital ties, promote a sustained recovery and growth of the macroeconomy, and fulfill the responsibility of state-owned capital in serving national development and people's well-being."

Meanwhile, as per the Ministry of Finance, the present operations and development of large state-owned commercial banks, as well as asset quality and provisioning, are stable, while the main regulatory indicators are in the "healthy range."

The ministry states that the move will help further consolidate and enhance the banks' sound operating ability, promote their high-quality development, create greater value for investors and bring long-term and stable returns. It adds that this will help banks better play the role of the main force in serving the real economy and providing strong support for the steady and long-term development of the national economy. 

Industry analysts said that the capital replenishment is a proactive measure that will strengthen the banks' capital foundations and optimize their capital structures. This move will enhance their operational resilience and risk management capabilities, enabling them to better serve the real economy and stabilize the financial system, they added.

(With inputs from Xinhua, cover via VCG)