Multiple banks redeemed preferred shares within the year.

Since the beginning of this year, several banks have launched preference shares redemption plans, showing a "dense and large-scale" characteristic. For example, Bank of China completed the redemption of all overseas preference shares in March; Industrial Bank completed the full redemption of 56 billion yuan in three phases of preference shares in July, becoming the largest single redemption of the year; Industrial and Commercial Bank of China redeemed $2.9 billion in overseas preference shares in September. In addition, city commercial banks such as Shanghai Bank, Hangzhou Bank, and Changsha Bank successively announced plans to redeem 20 billion yuan, 10 billion yuan, and 6 billion yuan in preference shares respectively in December. Yang Haiping, a researcher at the Shanghai Institute of Finance and Law, said that the concentration of redemption of preference shares by many banks this year is due to various reasons: firstly, the preferred shares redeemed by commercial banks this year had high face dividend rates at the time of issuance. In the current interest rate environment, commercial banks can significantly reduce their capital costs by redeeming these preference shares and replacing them with lower-cost capital instruments available in the current market. Secondly, commercial banks actively use various capital tools to optimize their capital structure and reduce their dependence on preference shares. For commercial banks, redeeming preference shares can reduce financial costs while sending a signal to the market that the bank has ample funds and is actively optimizing its capital structure.