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China Construction Bank completed a RMB 40 billion domestic undated Additional Tier 1 (AT1) bond issue on 22 September 2026. Its initial coupon is 1.83% for five years, after which it resets every five years; CCB may redeem the bonds on interest payment dates from year five, subject to conditions. The proceeds are intended to replenish AT1 capital. CCB’s H1 2026 results provide context for its earnings, capital and asset quality, but the available figures do not establish that its Hong Kong-listed shares are undervalued.
What CCB issued in September 2026
The issue was the second tranche of CCB’s 2026 domestic undated AT1 capital bonds. CCB said the RMB 40 billion proceeds would replenish additional Tier 1 capital, subject to applicable laws and regulatory approvals. The bonds were issued in China’s national interbank bond market and described as a Bond Connect issuance.
| Term | What is established |
|---|---|
| Issue completion | 22 September 2026 |
| Amount | RMB 40 billion |
| Maturity | Undated; no scheduled maturity date is stated in the announcement summary |
| Initial coupon | 1.83% for the first five years |
| Coupon reset | Every five years |
| Issuer redemption | Conditional issuer right on each interest payment date beginning in year five; redemption is not guaranteed |
| Stated use of proceeds | Replenish AT1 capital, subject to applicable law and regulatory approvals |
| Market | National interbank bond market; described as a Bond Connect issuance |
The 1.83% figure is the initial coupon, not a statement of the yield an investor would earn. A realized return would depend on the bond’s price, coupon resets, payment performance and whether CCB exercises its conditional redemption right. The available announcement summary does not establish secondary-market pricing, current yield or retail availability.
Why the proceeds count toward AT1 capital
CCB designated the proceeds to replenish additional Tier 1 capital, and described the instrument itself as an undated AT1 capital bond. AT1 is a regulatory-capital category, distinct from ordinary shares and from Tier 2 capital. It is not a retail deposit. The raised cash alone does not explain the regulatory treatment: that depends on the instrument’s terms and applicable rules and approvals.
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The available summary does not set out a complete term sheet, including the precise loss-absorption provisions, ranking or all conditions for regulatory recognition. It is therefore safer to describe the issue as CCB’s designated AT1 capital bond rather than infer unreported legal mechanics from the coupon and perpetual structure.
Does it dilute CCB shareholders?
The announced issue is a bond issue, not an ordinary-share offering, so it does not itself announce the issuance of new ordinary shares. The information available here does not establish whether any other share dilution could arise under the bond’s full terms. It also does not establish that the bond’s capital benefit is equivalent to an equity raise.
What CCB’s H1 2026 results show
CCB’s interim results announcement, dated 28 August 2026, covers the six months ended 30 June 2026. The bank reported year-over-year growth in operating income and net profit, alongside separately reported capital and asset-quality ratios.
| Measure | CCB’s reported H1 2026 result |
|---|---|
| Operating income | RMB 426.333 billion, up 10.48% year over year |
| Net profit | RMB 171.677 billion, up 5.56% year over year |
| Net interest income | RMB 310.958 billion, up 8.46% year over year |
| Net non-interest income | RMB 115.375 billion, up 16.31% year over year |
| Net interest margin | 1.37%; reported up 3 basis points year over year and 1 basis point from Q1 2026 |
| Weighted average return on net assets | 9.52% |
| Annualized average return on assets | 0.74% |
| Capital adequacy ratio | 19.42% |
| Core Tier 1 capital adequacy ratio | 14.24% |
| Non-performing loan ratio | 1.29%, 0.02 percentage points lower than at year-end 2025 |
| Allowance-to-NPL ratio | 238.69% |
These figures indicate the bank’s reported performance and position at the stated reporting period; they do not by themselves show why CCB made this particular capital issue, whether it could have avoided raising capital, or how resilient it would be under future stress. The reported capital ratios and the new bond are related to capital reporting, but the figures do not establish a direct causal link between the ratios and the decision to issue.
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Interim dividend proposal
CCB proposed an interim cash dividend of RMB 2.010 per ten ordinary shares, tax inclusive, subject to shareholder approval. It is a proposal, not evidence here that the dividend had been approved or paid.
Keep the AT1 bond separate from CCB’s other instruments
CCB’s half-year report describes other capital instruments that should not be conflated with the September AT1 bond. Its 2017 domestic preference shares remained outstanding at 30 June 2026. The report says their proceeds were used to replenish AT1 capital and classifies the preference shares as equity in the financial statements. It also describes conversion triggers, including an AT1 trigger at a CET1 ratio at or below 5.125%. Those terms concern the preference shares and should not be attributed to the new bond.
| Instrument | Reported details | How it differs from the September AT1 bond |
|---|---|---|
| 2026 domestic undated AT1 bond, second tranche | RMB 40 billion; completed 22 September 2026; initial five-year coupon of 1.83% | The issue discussed here |
| 2017 domestic preference shares | 600 million shares with a carrying value of RMB 59.977 billion at 30 June 2026; classified as equity in the financial statements | Outstanding preference shares, not the new bond tranche |
| Ten-year Tier 2 bonds | RMB 60 billion issued on 24 July 2026 at a 1.88% coupon | A separate Tier 2 issuance |
| TLAC noncapital bonds | RMB 50 billion issued on 24 August 2026: RMB 35 billion with a four-year term at 1.68%, and RMB 15 billion with a six-year term at 1.80% | Separate TLAC noncapital issuance; not the September AT1 issue |
The Tier 2 and TLAC amounts are not part of the RMB 40 billion September AT1 tranche. Combining them would misstate the size of that issue and blur different instrument categories.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Does the issue support an undervaluation case for CCB shares?
Not on the evidence available here. A bank’s capital issuance and operating results do not, on their own, show that its shares trade below fair value. No timestamped H-share price, price-to-book ratio, peer valuation comparison or intrinsic-value analysis is established in the cited material. CCB’s Hong Kong-listed H-shares trade under code 00939; its A-shares trade under code 601939. Any valuation claim needs to specify which share line it covers.
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- A dated share price and a clearly defined valuation measure, such as price-to-book, based on the relevant share line.
- A defensible comparison with CCB’s own history or comparable banks, using the same reporting period and accounting basis.
- A view of sustainable returns on equity and how net interest income may respond to funding costs, lending conditions and margin changes.
- Asset-quality trends, including how non-performing loans and their coverage evolve rather than relying on one reporting date.
- Consideration of capital allocation, dividend policy, state ownership and regulation, alongside the reasons a valuation discount might persist.
The reported 9.52% weighted average return on net assets and 1.37% net interest margin are useful inputs to such an analysis, not a valuation verdict. A claim that the stock is undervalued remains an investment thesis unless it is supported by current price data and a transparent comparison.
How to assess the bond separately from the shares
The bond and CCB’s listed shares present different questions. For an AT1 bond, an investor would need to examine the full terms and compare permanence, coupon reset reference, call conditions, loss-absorption provisions, ranking, currency and liquidity. The figures available here do not establish all those terms or support a complete comparison with other AT1 securities. For the shares, the relevant analysis instead concerns valuation, earnings durability, asset quality, capital and distributions.
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