China's National Financial Regulatory Administration published the Measures for the Administration of M&A Loans of Commercial Banks, revising and replacing the prior M&A loan risk management guidelines to expand the scope of permissible transactions and relax key loan parameters while tightening core risk assessment expectations. The 34-article measures allow M&A loans to be used for equity-participation acquisitions in addition to control acquisitions. For control acquisitions, they raise the maximum proportion of an M&A loan in the transaction consideration from 60% to 70% and extend the maximum loan term from seven years to ten years. The framework also introduces differentiated business-qualification requirements, including different asset size requirements for banks offering control-type versus equity-participation M&A loans, and emphasises assessment of the acquirer’s debt-servicing capacity alongside scrutiny of both the borrower and the transaction. Following a 20 August to 20 September 2025 public consultation, the final text further clarifies loan replacement requirements and sets entrusted payment requirements. Transitional arrangements include allowing banks that were already conducting M&A lending and meet the Article 5 qualification conditions after issuance to continue without re-filing, while banks that no longer meet the qualification must let existing business run off without renewal. Loans with contracts signed before issuance may continue under their contractual terms until maturity, and separate pilot policies for technology enterprise M&A loans and non-resident M&A loans in Shanghai’s Lingang New Area remain effective.
China Banking and Insurance Regulatory Commission 2025-12-31
China's National Financial Regulatory Administration issues new commercial bank M&A loan rules allowing minority-stake deals and raising the cap to 70% with a 10-year maximum term
China's National Financial Regulatory Administration issued new Measures for the Administration of M&A Loans of Commercial Banks, expanding permissible transactions and relaxing loan parameters while tightening risk assessments. Key changes include raising the maximum M&A loan proportion for control acquisitions to 70% and extending loan terms to ten years. The measures introduce differentiated qualification requirements and emphasize debt-servicing capacity assessments.