The Growth of Green Financial Bond Issuance by Chinese Banks

Recently, a number of commercial banks have successfully issued green financial bonds in the national inter-bank market. Since the beginning of this year, the issuance of green financial bonds has intensified. According to data from Oriental Fortune Choice, as of May 7, commercial banks planned to issue green financial bonds of 135.8 billion yuan, an increase of 140.78% over the same period last year. At the same time, more and more small and medium-sized banks have joined the ranks of issuance.

Experts interviewed by a reporter from Securities Daily said that under the background of the “dual carbon” goal, the rapid growth of bank green credit has prompted banking financial institutions to increase the scale of green financial bond issuance. For small and medium-sized banks with an increasing proportion of issuers, it is very important to find suitable green projects and improve green finance-related talents and professional capacity building.

Intensive issuance of green financial bonds in March

The reporter learned from Industrial Bank that recently, the bank successfully issued the first phase of green financial bonds in 2023, with an issuance scale of 27 billion yuan, a term of 3 years, and a coupon rate of 2.77%, which attracted the participation of various types of investors in the market. 2.5 times oversubscribed.

Under the “double carbon” goal, commercial banks are actively issuing green financial bonds. According to data from Oriental Fortune Choice, as of May 7, 17 commercial banks had issued green financial bonds, compared with 10 commercial banks in the same period last year. This year, both the number of issuers and the scale of issuance of green financial bonds have increased significantly. It is worth mentioning that in March alone, 10 commercial banks issued green financial bonds.

Ming Ming, chief economist of CITIC Securities, told the “Securities Daily” reporter that the increase in the issuance of green financial bonds by commercial banks this year is due to the impact of the redemption wave at the end of last year, and the cost of bond issuance has increased significantly. However, since March, the benchmark interest rate has been steadily falling, which has led to a significant decline in the cost of issuing financial bonds. Some of the backlog of commercial banks’ demand for bond issuance has been released in a concentrated manner, and a considerable part of it is green financial bonds.

Compared with other types of green bonds, green financial bonds are not directly invested in green projects, but issued through green credit to support corporate or project financing.

“Since the beginning of this year, with the introduction of local green and low-carbon transformation support policies, the financing needs of enterprises have increased, and the proportion of green credit has increased, which will promote commercial banks to use green financial bonds to leverage social capital and improve capital liquidity. support the green development of the real economy.” Fang Yi, assistant general manager of the Green Finance Department of Oriental Jincheng, told the reporter of “Securities Daily”.

According to Yang Anlan, a researcher at the R&D Department of Far East Credit, green financial bonds have played a vital role in promoting the realization of the global “double carbon” goal, and through strict standards and regulatory mechanisms, the authenticity and integrity of green bonds are guaranteed. effectiveness. These measures have provided strong support for China to achieve the “double carbon” goal, and will further promote China’s economic transformation and sustainable development.

The quality of information disclosure needs to be improved

From the perspective of green financial bond issuers, in addition to large state-owned banks and joint-stock banks, more and more small and medium-sized banks are appearing. Among the above-mentioned 17 commercial banks that issued green financial bonds, 10 are small and medium-sized banks.

“The issuers of green financial bonds continue to expand, and some local small and medium-sized commercial banks have joined the ranks of issuers.” Mingming said that this means that the task of financial support for green transformation does not only fall on the big banks. In fact, local banks are deeply involved in the local area. Local enterprises that meet the needs of green financing have a better understanding and can improve the effectiveness of the financial industry in serving green development.

Fang Yixiang said that more and more small and medium-sized banks have become the main issuers of green financial bonds mainly due to three aspects: First, the policy has vigorously guided and encouraged them. Under the background of the “double carbon” goal and Chinese-style modernization, the regulatory authorities have increasingly clear requirements for financial institutions to support and serve the green and low-carbon development of the real economy. Green finance regulatory policies are transmitted from top to bottom, and radiate from the green finance reform demonstration zone to other places. More and more small and medium-sized local banks are actively responding. Second, the demand for green investment and financing continues to rise. Local small and medium-sized banks can develop corresponding products based on local green projects and support local green economic development by issuing green financial bonds. Third, the concept of green development of banking financial institutions has been continuously deepened.

However, Fang Yixiang also mentioned that at present, small and medium-sized banks still have some difficulties in finding suitable green projects, and often there are not enough green projects that meet the standards. In terms of green certification standards, the certification standards for green credit and green bonds have not yet been fully unified, and the differences in support for green certification standards are not conducive to the effective connection between various products.

Mingming believes that at present, the main problem in the development of green financial bonds is that the quality of information disclosure needs to be improved. At this stage, all green financial bonds need to disclose environmental benefit indicators in the prospectus. However, due to the wide range of investment in green projects, there is no obvious comparable uniform standard among various green investments. Therefore, the next step is to improve the accuracy and accuracy of information disclosure. frequency, to better realize the transmission of green finance to green investment, and to help the medium and long-term realization of the “double carbon” goal.

“Although there are still some problems in the development of green financial bonds, the development of green finance is in line with the general trend of the times.” Fang Yixiang said that the issuance of green financial bonds by financial institutions such as banks can not only better support enterprises in green and low-carbon development, but also promote The green industry continues to grow, and it can also use this to continuously enrich the green product system, improve green financial capacity building, and achieve its own business optimization and sustainable development. It is foreseeable that with the advancement of Chinese-style modernization, green financial bonds are expected to enter a stage of high-quality development.

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