Shandong Bank's Convertible Bond Successfully Redeemed, Core Capital Adequacy Ratio to Rise
August 14th, Shandong Bank announced that its "Shandong Convertible Bond" had successfully redeemed and was officially delisted from the Shanghai Stock Exchange.
According to the announcement, a total of approximately 79.9 billion yuan in convertible bonds had been converted into company A-shares ordinary shares, with a total conversion amount of approximately 15.7 billion shares. Following this redemption, the bank's total share capital increased to 61.5 billion shares. According to calculations by CITIC Securities, after the convertible bond was redeemed, the bank's core Tier-1 capital adequacy ratio is expected to rise to 11.62%.
Shandong Convertible Bond Prematurely Redeemed
On July 5th, Shandong Bank announced that the "Shandong Convertible Bond" had triggered the conditional redemption clause and would exercise its early redemption right. According to the announcement, Shandong Bank's stock price has risen above the conversion price of the convertible bond by 130% (including 130%) over the past 30 trading days from June 3rd, 2025 to July 4th, 2025, triggering the conditional redemption clause and allowing the bank to exercise its early redemption right.
It is worth noting that the "Shandong Convertible Bond" was issued on November 29th, 2022 with a scale of 80 billion yuan and a term of six years from 2022 to 2028, and was listed for trading on the Shanghai Stock Exchange in December 2022. This also means that the convertible bond has been redeemed about three and a half years ahead of schedule, making Shandong Bank one of the fastest convertible bonds to be redeemed among listed banks in recent five years.
This year, bank stocks have performed strongly, with many banks' convertible bonds completing conversion and redemption. In addition to Shandong Bank, four other banks, including Chengdu Bank, Suzhou Bank, Hangzhou Bank, and Nanjing Bank, have completed the early redemption of their convertible bonds this year.
Main Shares and Performance Continue to Improve
The long-term rise in stock prices is a prerequisite for triggering the convertible bond's early redemption. Since last year, Shandong Bank's stock price has continued to rise, with a cumulative gain of 49.51% in 2024. In 2025, the bank's stock price remains strong and continues to rise. The increase in stock prices is not unrelated to the bank's excellent operating performance development. According to Shandong Bank's half-yearly financial report for 2025, the company achieved revenue of approximately 67.82 billion yuan, a year-on-year increase of 5.76%; net profit attributable to shareholders was approximately 27.34 billion yuan, a year-on-year increase of 16.48%; and adjusted net profit was approximately 26.83 billion yuan, a year-on-year increase of 17.11%, achieving steady growth in operating efficiency.
Some industry insiders believe that the bank's early redemption of convertible bonds not only allows for rapid replenishment of Tier-1 capital and optimization of capital structure to enhance its strength, but also sends a positive signal to the market about the bank's financial stability and operating stability, which can help boost investor confidence and attract funds to buy bank stocks, forming a virtuous cycle. CITIC Securities believes that after the convertible bond is redeemed, the static calculation shows that Shandong Bank's expected core Tier-1 capital adequacy ratio for 2025 will reach 11.62%, an increase of 0.87 percentage points from 2024, providing further growth space on a high capital adequacy ratio base.