In-depth Analysis of Jiangsu Bank's Core Tier 1 Capital Adequacy Ratio of 8.61% Approaching Regulatory Red Line

This analysis is based on Jiangsu Bank’s 2025 Q3 report and media reports from Huxiu.com [1]. The bank’s Core Tier 1 Capital Adequacy Ratio has dropped to

, just away from the regulatory red line for domestic systemically important banks, significantly increasing capital supplement pressure.

As one of the 20 national systemically important banks and the largest legal-person bank in Jiangsu Province, Jiangsu Bank’s total assets reach 4.93 trillion yuan, an increase of 24.68% from the beginning of the year, firmly ranking first among city commercial banks. However, behind this rapid expansion lies the severe challenge of rapid capital consumption.

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According to China’s commercial bank capital regulatory requirements [3], Jiangsu Bank, as part of the first group of domestic systemically important banks, needs to meet the following:

Capital Requirement Category	Core Tier 1 Capital Adequacy Ratio	Tier 1 Capital Adequacy Ratio	Capital Adequacy Ratio
Minimum Capital Requirement	5%	6%	8%
Reserve Capital Requirement	+2.5%	+2.5%	+2.5%
Systemically Important Bank Surcharge	+0.25%	-	-
Total Requirement	7.75%	8.5%	10.5%
Jiangsu Bank’s Actual Level	8.61%	11.28%	12.47%

: Although 8.61% is higher than the minimum requirement of 7.75%, the actual regulatory red line is 8.5%, with a safety margin of only 0.11 percentage points. If it continues to decline, it will touch the red line and may face regulatory measures such as business restrictions and mandatory capital supplementation.

• As of Q3 2025
  , the average Core Tier 1 Capital Adequacy Ratio of commercial banks was 10.87% [4]
• 42 A-share listed banks
  had an average of 10.55%, a decrease of 0.17 percentage points from the end of 2024 [5]
• Jiangsu Bank’s 8.61% is
  significantly lower than the industry average

The capital adequacy ratio change trajectory shows a continuous downward trend [1][2]:

Time Point	Core Tier 1 Capital Adequacy Ratio	Change
End of Sep 2024	9.27%	—
End of Dec 2024	9.12%	-0.15pp
End of Mar 2025	8.36%	-0.76pp
End of Jun 2025	8.49%	+0.13pp
End of Sep 2025	8.61%	+0.12pp

It has decreased by a total of 0.66 percentage points in one year, and the speed of capital consumption is worthy of attention.

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[1][2]:

• Total assets increased from 3.96 trillion yuan to 4.93 trillion yuan, a growth rate of 24.68%
• Corporate loan balance was 1.6641 trillion yuan, an increase of 26.26% from the end of last year
• Manufacturing loans: 360.6 billion yuan; infrastructure loans: 691.2 billion yuan

:

• Corporate loans account for over
  67%
  of total loans
• Manufacturing and infrastructure loans have high risk weights and consume a lot of capital
• Retail credit demand is weak, unable to effectively offset capital consumption

While this “heavy capital” business model drives scale growth, it also brings pressure on capital adequacy ratio.

[1]:

• In the first half of 2025,
  9 phases
  of personal loan non-performing asset packages were listed consecutively on the China Banking Asset Registration and Exchange Platform
• The scale of outstanding principal and interest reached 14.723 billion yuan
• Involving approximately 330,000 households

[2]:

• Non-performing loan ratio: 0.84%, a decrease of 0.05 percentage points from the beginning of the year
• Provision coverage ratio: 322.62%, a
  decrease of 27.48 percentage points
  from the end of last year
• Risk offset capacity has weakened

---

Despite capital adequacy pressure, financial performance remains strong [2]:

:

• Operating income: 67.183 billion yuan, a year-on-year increase of 7.83%
• Net profit attributable to parent company: 30.583 billion yuan, a year-on-year increase of 8.32%
• Net interest margin: 1.78%,
  far higher than the industry average of 1.42%
• Net interest income: 49.868 billion yuan, a year-on-year increase of 19.61%

:

• Strong profitability, but
  endogenous capital supplementation cannot keep up with asset expansion pace
• High profit growth mainly relies on scale expansion, not on improvement of per-unit asset profitability
• The sustainability of this growth model is
  questionable

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1. Private Placement (PP)

• Advantages: Directly supplement core Tier 1 capital
• Challenges: Listed banks generally have “broken net assets”, making PP pricing difficult; may dilute shareholder equity
• As of 2025, 25 non-listed banks have had their PP plans approved [6]

2. Convertible Bonds (CB)

• Advantages: Conversion to shares can supplement core Tier 1 capital; relatively low financing cost
• Challenges: Requires stock price rise to trigger conversion, with uncertainty; few cases of issuance by city commercial banks

3. Perpetual Bonds and Tier 2 Capital Bonds

• Limitations:
  Neither supplements core Tier 1 capital
• In 2025, the issuance scale of commercial banks’ “Tier 2 and perpetual bonds” exceeded 800 billion yuan [6]
• Limited help for current core Tier 1 capital pressure

[7]:

• Reduce cash dividend ratio and increase profit retention
• Control dividend payout ratio
• Some market views believe that delaying dividend announcements is to take care of capital adequacy ratio

: Even if all profits are retained, endogenous supplementation still cannot support the current expansion speed. The first three quarters’ net profit is 30.583 billion yuan, and relative to the 4.93 trillion yuan asset scale, endogenous supplementation capacity is limited.

According to the capital management plan disclosed at the bank’s 2024 annual general meeting [8]:

:

1. Formulate three-year capital plan and capital supplement plan
2. Establish group capital management system
3. Formulate quarterly business line capital quota plans and strictly implement them
4. Guide business to tilt towards high-return areas
5. Promote the construction of light capital banks

:

• 2025 net fee and commission income increased by 19.97% year-on-year
• Intermediary business capabilities are improving

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Users should pay attention to the following major risks:

1. Regulatory Compliance Risk

• Core Tier 1 Capital Adequacy Ratio is only 0.11 percentage points away from the red line
• Further decline will touch the red line, possibly facing business restrictions, mandatory capital supplementation, and regulatory rating downgrades
• History shows that banks with insufficient capital will face significant constraints on expansion capacity

2. Business Sustainability Risk

• Current rapid expansion model is
  unsustainable
• Continuing to rely on corporate loan expansion will accelerate capital consumption
• Business transformation faces a painful period, which may affect short-term performance

3. Refinancing Market Risk

• PP pricing is difficult in the state of broken net assets
• CB conversion to shares has uncertainty
• Market investment willingness in bank stocks affects financing feasibility

4. Asset Quality Risk

• Large-scale non-performing asset disposal indicates asset quality pressure
• Corporate loan credit risk may rise
• Provision coverage ratio decreases, risk offset capacity weakens

Monitoring Indicator	Current Value	Focus Points
Core Tier 1 Capital Adequacy Ratio	8.61%	Whether it continues to decline and touches the 8.5% red line
Asset Scale Growth Rate	24.68%	Whether the growth rate slows down
Corporate Loan Ratio	>67%	Whether the business structure is optimized
Provision Coverage Ratio	322.62%	Whether it continues to decline
Net Interest Margin	1.78%	Whether it continues to narrow

1. 2025 Annual Report
   (expected March 2026) - Focus on changes in capital adequacy ratio and capital supplement plans
2. 2026 Q1 Report
   (expected April 2026) - Implementation of capital supplement measures
3. 2026 Annual General Meeting
   (expected May-June 2026) - Capital supplement proposals and dividend policy adjustments

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Jiangsu Bank’s Core Tier 1 Capital Adequacy Ratio of 8.61% is close to the regulatory red line, reflecting the

. The key challenges facing the bank include:

:

• Business is dominated by corporate loans (67%), with high capital consumption
• Growth model relying on scale expansion is unsustainable
• Broken net assets limit external financing space

:

• Short-term
  : Control asset growth rate, optimize dividend policy, launch PP or CB
• Medium-term
  : Accelerate light capital transformation, optimize asset structure
• Long-term
  : Establish capital-saving business model, improve per-unit asset profitability

:

• 42 A-share listed banks’ capital adequacy ratios have collectively declined; this is a common industry challenge [5]
• New capital management regulations put forward stricter requirements for small and medium-sized banks [4]

Users should include capital adequacy ratio risk in comprehensive assessment, and closely follow the disclosure of the bank’s capital supplement plans and progress of business structure adjustment. Historical patterns show that banks with insufficient capital usually face multiple pressures such as regulatory rating downgrades, business restrictions, and stock price pressure.

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This report is based on market news analysis results [0] and the following external sources:

[1] Huxiu.com - “Jiangsu Bank: Sexy Financial Report, More Disturbing Hidden Worries”
URL: https://m.huxiu.com/article/4822495.html
Date: 2025-12-XX

[2] Jiangsu Bank 2025 Q3 Report and Related Financial Disclosures

[3] China’s Commercial Bank Capital Regulatory Requirements

[4] Banking Regulatory Data

[5] A-share Listed Banks Capital Adequacy Ratio Statistical Data

[6] Commercial Bank Refinancing Market Data

[7] Market Analysis on Dividend Policy

[8] Jiangsu Bank 2024 Annual General Meeting Materials