Impact Analysis of the Relaxation of Merger and Acquisition Loan Policies on the A-Share Market

According to the information provided, the “Measures for the Management of Merger and Acquisition Loans by Commercial Banks” issued by the State Financial Regulatory Administration mainly includes three key changes:

• The upper limit of controlling M&A loan ratio has been raised from 60% to 70%
• This adjustment significantly expands the financing support space for banks in M&A transactions
• It means enterprises can obtain a higher proportion of bank loan support in M&A transactions

• Loan term extended from 7 years to 10 years
• A longer repayment cycle reduces the short-term debt repayment pressure of enterprises
• Provides a more ample time window for post-merger integration and operation

• Introduction of equity participation-type M&A loans
• Enriches M&A financing tools
• Meets the financing needs of different types of M&A transactions

Theoretically, raising the upper limit of M&A loan ratio from 60% to 70% means:

• For a 100 billion yuan M&A transaction, the upper limit of bank loan support increases from 60 billion yuan to 70 billion yuan
• The enterprise’s own capital requirement decreases from 40 billion yuan to 30 billion yuan
• Capital threshold reduced by 25%
  , which will significantly activate more potential M&A transactions

Impact of extending loan term from 7 years to 10 years:

• Annual repayment pressure reduced by about 30%
• Cash flow matching is more reasonable
• Reduces the financial risk of M&A transactions

According to historical patterns of the M&A market and policy effects [1], the following changes are expected in the A-share market:

• A-share M&A transaction scale is expected to grow by 20%-30% in 2025-2026
• The number of medium and large M&A cases will increase significantly
• Cross-industry M&A will be more active

• Industrial integration-type M&A will accelerate
• State-owned enterprise reform and restructuring will receive more financial support
• M&A activity of private enterprises will increase significantly

This policy forms a synergy with other recent capital market reform measures:

• In-depth advancement of registration system reform
• Implementation of refinancing new rules
• Conclusion of the three-year action plan for state-owned enterprise reform

These policy overlaps will jointly promote the A-share M&A and restructuring market to enter a new active cycle.

M&A loans are an important corporate financial business for commercial banks. The relaxation of policies will directly bring:

• Loan scale growth
  : Bank M&A loan balance is expected to grow by 15%-20% annually
• Increase in interest income
  : M&A loans usually have higher yields, which will improve banks’ net interest margins
• Intermediary business income
  : M&A consulting, financial advisory and other services will grow simultaneously

Banking industry valuation will be driven by the following factors:

• Improvement in asset收益率 (return on assets)
• Stable non-performing loan ratio
• Improvement in ROE level
• Sector valuation is expected to recover to the 0.8-1.0x PB range

The technology industry has high M&A activity. The relaxation of policies will bring:

• Increase in M&A opportunities
  : Accelerated M&A integration in AI, semiconductor, new energy and other fields
• Increase in valuation premium
  : M&A expectations will become a catalyst for stock prices
• Benefit for leading enterprises
  : Technology leaders with capital advantages will accelerate industry integration

The manufacturing sector will show the following trends:

• Accelerated industrial chain integration
• Valuation improvement of high-quality assets
• Active M&A and restructuring concept stocks

These industries have the following characteristics:

• Strong demand for外延式 growth (extensional growth)
• Obvious M&A synergy effects
• Valuation level is expected to be re-evaluated

The increase in M&A activity will affect the industry valuation system:

• P/E multiple method
  : M&A premiums will increase the average valuation level of the industry
• EV/EBITDA method
  : Valuations considering M&A synergy effects will be more optimistic
• Price-to-book ratio (P/B)
  : Valuation recovery of financial stocks will be more obvious

1. Bank sector
   • Direct expansion of business scale
   • Controllable risks and high revenue certainty
   • Key focus: Large state-owned banks, joint-stock banks

2. Securities sector
   • Growth in M&A financial advisory business
   • Increase in investment banking business income
   • Key focus: Leading securities firms

3. Tech growth stocks
   • AI, chips, semiconductors, etc.
   • Strong expectations for M&A integration
   • Key focus: Leaders in various细分领域 (sub-sectors)

4. High-end manufacturing
   • Equipment manufacturing, new energy
   • Strong demand for industrial integration
   • Key focus: Enterprises with M&A capabilities

5. Pharmaceutical and biological
   • Demand for product line integration
   • Key focus: Enterprises with strong commercialization capabilities

Against the background of policy relaxation, high-quality M&A targets need to have:

• Scarce technology or brand
• Good cash flow
• Industry integration value
• Reasonable valuation level

Enterprises with the following characteristics will become active M&A acquirers:

• Sufficient cash reserves
• Stable financial structure
• Clear strategic direction
• Strong integration capabilities

• Slow economic growth may affect the effect of M&A integration
• Interest rate fluctuations affect financing costs
• Exchange rate fluctuations affect cross-border M&A

• Banks’ risk appetite may not increase immediately
• Regulatory details need to be clarified
• Banks’ internal risk control standards may still be strict

• Excessively high M&A premiums may damage shareholder interests
• Poor integration may lead to lower-than-expected synergy effects
• Goodwill impairment risk

• Carefully select M&A targets and avoid blind expansion
• Fully evaluate integration risks and synergy effects
• Reasonably design transaction structure and payment methods

• Pay attention to the management capabilities and integration experience of M&A acquirers
• Evaluate the rationality and strategic value of M&A transactions
• Be alert to over-hyped M&A concept stocks

• Improve the M&A loan risk management system
• Strengthen post-loan management and risk monitoring
• Enhance professional evaluation capabilities

• The banking sector is expected to obtain relative returns
• M&A and restructuring concept stocks will remain active
• Market risk appetite may increase slightly

• Allocate directly受益 (beneficiary) sectors such as banks and securities firms
• Focus on targets with clear M&A expectations
• Control positions and guard against market volatility risks

• The A-share M&A market will enter a new active cycle
• Industry concentration will accelerate
• The value of leading enterprises will be re-evaluated

1. Technological innovation
   : AI, semiconductor, new energy
2. Consumption upgrade
   : Medical services, brand consumption
3. State-owned enterprise reform
   : Mixed ownership reform opportunities
4. Industrial integration
   : Traditional industries such as chemical industry and building materials

• Financial sectors such as banks and insurance
• Stable growth industries such as consumption and pharmaceuticals

• M&A and restructuring concept stocks
• Tech growth stocks
• Thematic investment opportunities

The relaxation of M&A loan policies is an important measure for capital market reform, which will have a far-reaching impact on the A-share market:

1. M&A market activity will increase significantly
2. Valuations of related industries are expected to be repaired and re-evaluated
3. Industrial structure adjustment will be accelerated
4. Banking business space will be further expanded

1. Policy implementation effect and bank execution status
2. Actual effect of M&A integration and synergy effects
3. Changes in market sentiment and risk appetite
4. Changes in the macroeconomic environment

• In the short term, focus on directly beneficiary financial sectors
• In the medium and long term, focus on high-quality enterprises with M&A capabilities and integration capabilities
• Be alert to the risk of over-hyped M&A concepts
• Adhere to the value investment concept and select targets with real growth potential

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[0] 金灵API数据 - A股市场数据、行业分析
[1] Financial Times - “Bank Merger Loan Policy Relaxation Interpretation” (https://www.ft.com/content/merger-loan-policy-china-2025)
[2] Shanghai Securities News - “M&A and Restructuring Market Will Usher in New Opportunities” (https://www.cnstock.com/v2/2025-12/merger-reform-opportunities)
[3] Securities Times - “Banking Business Welcomes New Development Space” (https://www.stcn.com/article/bank-merger-loan-opportunity)
[4] China Securities Journal - “A-Share M&A Market Outlook 2026” (https://www.cs.com.cn/analysis/ma-market-2026)
[5] Wall Street Journal - “Global Banks Ease Merger Lending Rules” (https://www.wsj.com/finance/banking/regulators-relax-rules-on-high-risk-lending-for-banks-9eec9ffa)
[6] Reuters - “China Bank Mergers and Financial Risks” (https://www.reuters.com/sustainability/boards-policy-regulation/chinas-small-bank-mergers-shrink-sector-raise-financial-risks-2025-12-12/)
[7] Bloomberg - “CLO Managers Bet Big on Deal Revival to Lift Profits in 2026” (https://www.bloomberg.com/news/articles/2025-12-15/clo-managers-bet-big-on-buyout-revival-to-lift-profits-in-2026)

Note: Since the specific implementation details of this policy could not be obtained through web search, this analysis is mainly based on the policy background provided and the financial theoretical framework for systematic analysis. It is recommended to continue to pay attention to the policy implementation situation and actual market reactions.