China Development Bank Issuer Summary

Report date: 2026-05-20
Issuer: China Development Bank
Ticker / market shorthand: SDBC
Relevant bond issuer: China Development Bank and its issuing branches, including Hong Kong Branch where applicable
Primary credit focus: policy bank issuer credit, domestic policy-bank bonds, offshore senior unsecured notes, subordinated and Tier 2 instruments

Important scope note: this report is an issuer-level credit summary for China Development Bank (国家开发银行, hereafter CDB) on a consolidated basis. It does not treat every CDB-linked security as a government-guaranteed instrument. Domestic CDB financial bonds, offshore branch notes, subordinated bonds, Tier 2 capital bonds and subsidiary obligations have different legal claims, regulatory treatment and loss-absorption features. The issuer view therefore separates government support likelihood from explicit legal guarantee. For bond-level investment decisions, this initial report confirms the issuer-level profile, 2025 annual-report balance-sheet classification and broad Tier 2 loss-absorption language, but it does not replace review of each instrument's offering circular, pricing supplement, governing law, acceleration provisions, guarantee wording or regulatory approvals.

1. Business Snapshot and Recent Developments

CDB is a central-government policy bank that connects China's national development strategy with medium- to long-term financing. Rather than a conventional commercial bank, it is more accurately viewed as a development finance institution supporting infrastructure, basic industries, industrial upgrading, urbanisation, regional development, green finance, inclusive finance and international cooperation, including the Belt and Road Initiative. As of end-2025, its shareholders were the Ministry of Finance with 36.54%, Central Huijin with 34.68%, Wutongshu Investment Platform with 27.19%, and the National Council for Social Security Fund with 1.59%, meaning that it is effectively 100% owned by Chinese central-government-related entities.

For bond investors, the primary question is not CDB's profitability as a commercial bank, but the likelihood that the government will maintain CDB as core infrastructure for policy finance, and how far that support expectation is reflected in the legal claim of each individual bond. If CDB's funding were disrupted, China's infrastructure, industrial policy, regional development and policy-based financial tools would be affected. This difficulty of substitution supports its credit strength including support, but government-related ownership and policy mandates are not the same as a direct and unconditional government guarantee on all bonds.

At end-2025, consolidated total assets were RMB19.55tn, loans and advances were RMB15.69tn on the financial-condition discussion basis, total liabilities were RMB17.71tn, and debt securities outstanding were RMB14.86tn. CDB is not a deposit-led commercial bank, but a very large bond issuer that finances long-term policy assets. Net profit rose modestly to RMB91.47bn, but operating income declined to RMB146.40bn and net interest income fell to RMB112.13bn. At the same time, credit impairment losses fell sharply to RMB5.97bn, meaning that the preservation of 2025 earnings was supported more by lower credit costs than by improvement in the underlying interest margin.

Reported asset quality is strong. At end-2025, the NPL ratio was 0.34%, the allowance-to-loan ratio was 4.55%, Stage 3 balances were RMB163.2bn, and Stage 3 allowances were RMB126.8bn. However, Stage 2 balances were RMB1.53tn, and in long-term infrastructure and policy lending, delinquencies and non-performance can surface with a lag. The low NPL ratio is a major credit support, but it is not proof that there are no latent risks.

On the policy side, CDB has again emphasised its core function as an "infrastructure bank". In its 2025 annual report, CDB states that it extended more than RMB1.6tn of infrastructure loans during the year across the five major infrastructure areas, and that it established new-type policy-based financial tools under the guidance and support of the National Development and Reform Commission, the Ministry of Finance, the People's Bank of China and the National Financial Regulatory Administration. Policy mandates strengthen the logic for government support, but they also create low-yield, long-duration, concentrated and less transparent assets, as well as capital consumption. Both sides need to be considered when analysing CDB.

The issuer profile and recent changes can be summarised as follows.

2. Industry Position and Franchise Strength

CDB's franchise should be assessed not by deposit share or branch network, as for a commercial bank, but by its difficulty of substitution as a financial apparatus for implementing national policy. CDB's official Mission page states that its mission is to strengthen national competitiveness and improve people's livelihoods, positioning it as a financial institution that supports infrastructure, basic industries, urbanisation, livelihood projects, overseas investment and macroeconomic adjustment. CDB's lending and bond issuance are closely linked to China's medium- to long-term national development strategy rather than the maximisation of shareholder profit.

CDB also has an extremely strong position in the domestic bond market. According to its Funding in China page, issuance of CDB financial bonds is approved by the State Council and regulated by the People's Bank of China. In addition, CDB financial bonds held by commercial banks are assigned a 0% risk weight, and they also provide a basis for the investment regulations applicable to securities and insurance institutions. This treatment is a major reason why domestic investors treat CDB financial bonds as high-quality assets close to Chinese government bonds.

However, the 0% regulatory risk weight for domestic financial bonds should not be read as an explicit government guarantee for all CDB bonds globally. The 0% risk weight is a treatment under Chinese domestic regulatory-capital and investment-regulation frameworks; it does not automatically change investors' legal claim into a claim against the Chinese government. Domestic policy-bank bonds are strongly supportive of CDB's funding because of market liquidity, favourable regulatory treatment and a deep investor base. By contrast, overseas foreign-currency bonds, offshore RMB bonds, subordinated bonds and Tier 2 capital bonds require instrument-by-instrument review of issuer, branch, governing law, listing market, regulatory approvals and loss-absorption provisions.

CDB financial bonds function as benchmark instruments in China's bond market, and differ from ordinary corporate financial bonds in terms of tenor, issuance frequency, investor base and liquidity. CDB's 2025 annual report also states that it issued RMB3.31tn of RMB financial bonds domestically during the year, with more than RMB14tn outstanding, and that it issued USD2.7bn of overseas foreign-currency bonds and RMB5bn of overseas RMB bonds. This shows that CDB is recognised both domestically and internationally as a standing issuer of policy-bank bonds.

This franchise is a credit support, but it also indicates a high degree of funding dependence. CDB is not a bank naturally funded by deposit inflows; debt securities issuance is its main funding source. Continued market acceptance of CDB as a quasi-sovereign issuer is therefore a premise of its credit structure. In a scenario where the sovereign rating, domestic financial regulation, capital-market liquidity, or supply-demand conditions for policy-bank bonds changed materially, CDB's funding costs and rollover capacity would feed directly into its credit assessment.

CDB has not only a policy-finance "volume" role, but also an arranging and mobilisation role. Its 2025 annual report shows more than RMB1.8tn of new syndicated loan agreements during the year and the underwriting and issuance of 137 credit bonds totalling RMB405.5bn. CDB not only lends on its own balance sheet, but also acts as a financial intermediary that guides funds from other financial institutions and capital markets into policy areas. In conclusion, CDB is one of the highest-tier government-related financial issuers in China's financial system, but its strength cannot be assessed separately from government credit, policy mandates, regulation and the structure of the bond market.

3. Segment Assessment

If CDB's business is viewed by earnings segment like an ordinary company, the credit analysis can easily miss the main point. What matters is which policy functions it allocates funding to, and how that affects support likelihood, profitability, asset risk and capital consumption. The 2025 annual report shows that CDB conducts policy finance by combining infrastructure, new-type policy-based financial tools, the Five Major Areas, regional strategies, rural revitalisation, the Belt and Road Initiative, and subsidiaries engaged in investment, leasing and securities.

Infrastructure and industrial finance are CDB's raison d'être. In 2025, CDB extended more than RMB1.6tn of infrastructure loans to transportation, energy, water conservancy, urban, agricultural and rural, and national-security-related infrastructure. The support comes from integration with national policy, but the constraints are long maturities, low interest rates, and dependence on fees, demand, local government finances and subsidies. The new-type policy-based financial tools show that CDB provides catalyst funding not only through loans, but also through policy capital, funds and investment vehicles. This strengthens the support logic, but investment recovery, policy effectiveness, capital consumption and transparency need to be checked separately.

Funding allocation to the Five Major Areas broadens CDB's importance through the policy themes of technology, green, inclusive, elderly-care and digital finance. However, AI and technology finance are exposed to industrial-policy and technology-implementation risk, green finance to technology, tariffs, subsidies and project cash flows, and inclusive finance to small-borrower risk and on-lending bank management. In the Belt and Road Initiative and international cooperation, country risk, foreign-currency recovery, geopolitics, sanctions and jurisdictional risk are added. Subsidiaries and funds broaden the policy-finance function, but also bring in investment valuation, lease-asset, securities-market, foreign-currency and subsidiary-debt risks.

A functional credit assessment is as follows.

The conclusion from the segment assessment is that CDB's business diversification is not diversification of commercial earnings sources, but a layering of policy functions. The more policy mandates CDB has, the stronger the logic for government support. At the same time, the more policy mandates it has, the greater the low-profitability, long-duration, concentration, opacity, country-risk and capital-consumption issues. In assessing CDB's credit strength, these should not be offset into a simple statement that it is "safe because it is government-related"; the strength of support and the accumulation of asset risk need to be assessed at the same time.

This functional assessment is qualitative and provisional at this stage. From the 2025 annual report, the annual amount of infrastructure lending, the establishment of new-type policy-based financial tools, and priority allocation to the Five Major Areas and the Belt and Road Initiative can be confirmed. However, detailed extraction has not yet been possible for ending loan balances by function, NPLs by function, Stage 2, restructured loans, local-government and property-related details, overseas country exposures, and investment recovery or capital consumption in policy-based financial tools and funds. This segment assessment should therefore be read as a map of the risks to look for, not as a definitive assessment of loss rates or capital consumption by area. In the next update, priority should be given to policy-based financial tool and fund balances, overseas country risk, and exposures around local governments and property.

4. Financial Profile and Analysis

CDB's financial profile reinforces the strength of its supported credit quality, but caution is required before treating it as sovereign-equivalent on a standalone basis. At end-2025, total assets were RMB19.55tn, gross loans and advances to customers were RMB16.40tn on the annual-report key-indicator basis, the NPL ratio was 0.34%, and the capital adequacy ratio was 12.81%. Scale, asset quality and capital are all superficially strong. However, CDB is not a high-ROE commercial bank; it is an issuer that carries policy mandates, operates under compressed spreads, and funds long-duration assets through the bond market. Credit analysis should therefore place more weight on asset quality, allowances, capital, continued funding access and the link to government support than on the absolute level of earnings.

The main indicators have developed as follows.

The most important point from this table is that CDB's credit strength is supported not by rapid earnings growth, but by scale, low NPLs, allowances, capital and market access. Net profit increased from RMB80.8bn in 2021 to RMB91.5bn in 2025, but given that total assets reached RMB19.5tn, ROA is low. ROA was 0.48% and ROE was 5.07% in 2025, so CDB cannot be described as a highly profitable commercial bank. This is less a weakness of CDB than a reflection of the policy-bank model of capital preservation and modest profit.

Looking at 2025 earnings, the decline in net interest income is notable. Interest income from loans was RMB479.9bn and interest income from bond investments was RMB43.5bn, bringing total interest income to RMB547.2bn, down from RMB613.1bn in 2024. Interest expense also fell to RMB435.1bn, but net interest income was only RMB112.1bn, down by about RMB29.0bn from RMB141.1bn in 2024. As a policy financial institution, CDB is involved in national strategy and in reducing funding costs for the real economy, so margin compression can be structural. The issue is not simply that a lower interest-rate environment is safe; it is necessary to monitor how far the margin can support internal capital generation.

By contrast, credit impairment losses improved sharply in 2025. Credit impairment losses on loans and advances were RMB9.95bn, and overall credit impairment losses were RMB5.97bn, down materially from RMB40.07bn in 2024. As a result, operating profit and net profit increased despite the decline in operating income. From a credit perspective, the decline in the NPL ratio and credit costs in 2025 is positive. However, policy-bank lending is long term, and borrowers' repayment capacity often depends on government support, local government finances, project progress and tariff income. A single-year decline in credit costs should not be read as the disappearance of risk.

To frame earnings quality numerically, in 2025 net interest income declined by about RMB29.0bn year on year, while credit impairment losses improved by about RMB34.1bn. The increase in net profit was only about RMB2.5bn, so the 2025 earnings increase should be read as substantially supported by lower credit costs, rather than by an expansion in the underlying interest margin. If NII continues to fall and credit costs return to the 2024 level, internal capital generation would be constrained by low ROA and low ROE.

Looking at asset quality in more detail, the gross amount of loans, lease receivables and similar assets measured at amortised cost was RMB16.38tn, of which Stage 1 was RMB14.69tn, Stage 2 was RMB1.53tn, and Stage 3 was RMB163.2bn. Stage 2 accounts for slightly more than 9% of the total and cannot be ignored as an area of potential credit deterioration. Stage 2 allowances were RMB357.9bn, larger than Stage 1 allowances of RMB265.2bn. This shows that CDB has built allowances against future loss risk, but it also shows that the low NPL ratio alone does not capture all risks in the loan book.

The 2025 supplementary indicators are as follows.

Capital is adequate, but it should not be described as excessively thick. At end-2025, consolidated total capital was RMB2.00tn, Tier 1 capital was RMB1.72tn, and CET1 capital was RMB1.71tn. The consolidated capital adequacy ratio was 12.81%, the Tier 1 ratio was 10.97%, and the CET1 ratio was 10.96%. Some large commercial banks have higher CET1 ratios, so it would not be appropriate to assess CDB's capital ratio only as absolutely strong. However, considering the likelihood of government support as a policy bank, low NPLs, large allowances and market access, capital is not currently insufficient for maintaining the present scale of business.

The constraints in the financial profile are earnings quality, latent credit risk, the relative thinness of capital and funding dependence. With net interest income declining, 2025 earnings were supported by lower credit costs. Stage 2 balances remain large, and the true recovery risk in policy assets could appear with a lag through the economy, property, local government finances and project revenues. Capital ratios are improving, but low ROA and low ROE mean that rapid internal capital accumulation should not be expected. Because debt securities account for most liabilities, capital-market access is always central to the credit analysis.

Overall, CDB's standalone financials reinforce its supported credit strength. Low NPL ratios, large allowances, stable earnings and improving capital ratios are clear strengths. At the same time, standalone CDB financials alone are not sufficient to equate it with the Chinese government. CDB can be rated highly because standalone financials are combined with government ownership, policy mandates, the institutional treatment of its domestic financial bonds and the support likelihood embedded in rating-agency assessments.

5. Structural Considerations for Bondholders

The central issue in CDB bond investment is to separate the strength of issuer credit from the legal protection of individual bonds. CDB itself is a central-government-related Chinese policy bank, and support likelihood is extremely high. However, CDB bondholders do not always have a direct claim against the Chinese government. Especially for overseas issuance, branch issuance, subordinated bonds, Tier 2 capital bonds and subsidiary-issued bonds, investors need to confirm the counterparty to the claim, ranking, loss absorption, regulatory approvals and governing law.

The basis for government support is strong. First, CDB is 100% government-related owned. Second, CDB supports, from the financing side, policies that the government prioritises, including infrastructure, national strategy, policy-based financial tools, the Five Major Areas and the Belt and Road Initiative. Third, domestic CDB financial bonds are issued under State Council approval and People's Bank of China regulation, and receive a 0% risk weight when held by commercial banks. Fourth, S&P's China GRE Ratings List classifies CDB as central-government-related, with a Critical role, an Integral link with the government, an Almost certain likelihood of support, and an A+/Stable/A-1 rating.

At the same time, these factors are not an explicit guarantee in themselves. CDB is a financial institution, not a government agency, and the direct debtor of its bonds is CDB or the relevant issuing branch or issuing vehicle. Domestic financial bonds are treated in regulation and market practice as extremely high-quality assets, but they are not legally Chinese government bonds themselves. For foreign-currency bonds and offshore RMB bonds, issuing branch, paying agent, governing law, cross default, negative pledge, tax gross-up, sanctions, foreign-exchange and capital-control treatment should be checked instrument by instrument.

Subordinated bonds and Tier 2 capital bonds need to be treated separately again. The 2025 annual report states that RMB subordinated bonds were issued in 2011-2012, mature in 2041-2062, and had an outstanding balance of RMB29.9bn; RMB Tier 2 capital bonds were issued in 2022-2023, mature in 2032-2038, and had an outstanding balance of RMB99.8bn; and subsidiary USD Tier 2 capital bonds were issued in 2025, mature in 2035, and had an outstanding balance equivalent to RMB3.5bn. The annual-report notes explain that Tier 2 capital bonds have the feature that, if a regulatory trigger event occurs, the full principal amount is written down and unpaid interest becomes unpayable. Therefore, even though CDB's supported credit quality is high, Tier 2 should not be treated as having the same risk as senior debt.

The main bond and structural issues are as follows. It is necessary to separate the facts confirmed in this report from the terms that remain unverified before individual investment decisions.

The structural conclusion is that CDB's own senior bonds can be placed among the highest-tier Chinese quasi-sovereign financial issuers, but they are not identical to government-guaranteed bonds. In domestic financial bonds, quasi-sovereign characteristics are extremely strong in market practice and regulation. In overseas bonds and capital instruments, however, a gap remains between support expectation and legal claim. In particular, what has been confirmed in this report is limited to balances and classifications in the annual-report notes, the regulatory treatment of domestic financial bonds, and the general loss-absorption language for Tier 2. Details of guarantees in OCs, governing law, acceleration events, cross default, tax gross-up and payment ranking remain unverified. For individual bond investments, this gap should be reflected in spread, liquidity, terms and ranking.

6. Capital Structure, Liquidity and Funding

CDB's funding structure is central to its credit quality. At end-2025, total liabilities were RMB17.71tn, of which debt securities outstanding were RMB14.86tn, accounting for 83.92% of liabilities. Borrowings from governments and financial institutions were RMB707.7bn, and placements from financial institutions, customer deposits and similar items were RMB2.00tn. Unlike a conventional deposit-taking bank, CDB's main funding source is the bond market. Because this structure is supported by the depth of the domestic policy-bank bond market, it is a strength in normal times, but it also represents dependence on market access.

The 2025 issuance record shows the strength of CDB's funding capacity. According to the annual report, CDB issued RMB3.31tn of RMB financial bonds in mainland China during the year, bringing the balance to more than RMB14tn. Overseas, it issued USD2.7bn of foreign-currency bonds and RMB5bn of overseas RMB bonds. Green financial bonds totalled RMB30.5bn during the year, of which the first tranche aligned with the 2025 Green Finance Supported Project Catalogue was RMB13.5bn, while technology innovation bonds totalled RMB20bn. CDB also issued RMB174.6bn of floating-rate bonds and states that it ranked first in the market in terms of issuance volume and outstanding balance.

Looking at the breakdown of debt securities, domestic RMB financial bonds issued by CDB itself are overwhelmingly large. The annual-report notes show that at end-2025, domestic RMB financial bonds outstanding were RMB13.79tn, RMB special bonds were RMB568.5bn, overseas RMB financial bonds were RMB14.7bn, and overseas foreign-currency financial bonds were RMB52.4bn. CDB's own issued bonds totalled RMB14.42tn, and after adding subsidiaries' foreign-currency notes, domestic RMB bonds and overseas RMB notes, and deducting intra-group holdings, the note-basis debt securities balance was RMB14.47tn. This differs from the debt securities balance of RMB14.86tn in the financial summary due to differences in scope of presentation, accrued interest and similar factors, but under either figure, domestic financial bonds are overwhelmingly the main funding source.

There are limits to what can be confirmed about liquidity from public materials. At end-2025, cash and cash equivalents were RMB906.4bn, down from RMB977.4bn at end-2024. Cash equivalents include balances with central banks and banks, financial assets purchased under resale agreements, placements with financial institutions and investments in short-term government bonds. This is a large amount, but given CDB's debt securities balance and credit-commitment scale, credit strength cannot be assessed on cash alone. What matters is continued access to the domestic policy-bank bond market, the investor base, institutional links with the People's Bank of China and regulators, diversification of issuance tenors, and hedging and refinancing of foreign-currency debt.

The quantitative assessment of short-term liquidity is provisional in this report. Because LCR, NSFR, maturity ladder, unused lines, currency-by-currency liquidity and foreign-currency hedge details have not been confirmed, this report does not quantify how many months CDB could withstand if issuance markets were closed for a period. Based only on confirmed figures, cash and cash equivalents of RMB906.4bn are about 6% of debt securities outstanding of RMB14.86tn. They are also small relative to annual domestic RMB financial bond issuance of RMB3.31tn and credit commitments of RMB5.74tn, so CDB is not a model in which cash alone absorbs very large funding needs. The most important monitoring items are therefore the continued functioning of the domestic policy-bank bond market, issuance across diverse tenors, refinancing routes for overseas foreign-currency and offshore RMB debt, and institutional links with the authorities and the central bank.

Credit commitments were RMB5.74tn at end-2025, up from RMB5.06tn at end-2024. Most were loan commitments exceeding one year. As a policy bank, CDB has the role of drawing down approved and committed long-term lending in the future, so off-balance-sheet credit commitments are an important element of funding needs and liquidity management. Large credit commitments themselves reflect the policy mandate, but during phases of economic support or rollout of new-type policy-based financial tools, loan disbursements and bond issuance needs may increase simultaneously.

In the capital structure, equity was RMB1.84tn and total capital was RMB2.00tn at end-2025. CDB has issued subordinated bonds and Tier 2 capital bonds, which supplement regulatory capital. Tier 2 capital bonds are effective for capital management, but from a bond-investor perspective, they carry loss absorption and subordination. The stronger CDB's credit quality, the more likely Tier 2 instruments are to attract investor demand, but ranking differences do not disappear under stress.

Funding and liquidity can be summarised as follows.

The greatest funding strength is that domestic investors accept CDB financial bonds as extremely high-quality and highly liquid policy-bank bonds. This not only reduces CDB's default risk, but also underpins the business model that allows it to continue large-scale, long-term lending. The greatest constraint is that this strength depends on institutional arrangements and market confidence. If the Chinese sovereign, regulatory treatment of policy-bank bonds, domestic interest rates, bond-market liquidity or overseas investor appetite for Chinese quasi-sovereigns changes, CDB's funding costs and market assessment will also move.

7. Rating Agency View

The rating-agency view clearly indicates that CDB's credit quality is strongly supported not only by standalone financials but also by government support. However, the only external rating support analysis confirmed in detail for this report is S&P's China GRE Ratings List. In S&P Global Ratings' China GRE Ratings List, as of 2026-04-30, CDB was rated A+/Stable/A-1, with the related government identified as the central government, its role assessed as Critical, its link with the government as Integral, its likelihood of support as Almost certain, and its industry as Policy Bank. This shows that S&P assesses CDB not as an ordinary bank, but as a Chinese government-related issuer with support expectations very close to the sovereign.

The 2025 annual report also states that international rating agencies including S&P and Moody's rate CDB at the same level as the Chinese sovereign. However, as of this report, the full issuer-specific reports from Moody's, Fitch and S&P have not been obtained. For Moody's, reports were confirmed stating that it maintained China's sovereign A1 rating and changed the outlook to stable in April 2026, but this is supplementary confirmation of the Chinese sovereign environment and is not the full latest CDB-specific outlook or rating rationale. For Fitch as well, the latest primary CDB-specific release text has not been confirmed in this report. Cross-agency support notching and security-level rating differences should therefore be checked in the next update.

With this limitation, the rating-agency view should be used as follows. First, on a supported basis, CDB is treated as an issuer close to the Chinese sovereign. Second, that support assessment arises from government ownership, policy mandates, importance within the domestic financial system, and the institutional position of domestic bond issuance. Third, the ratings do not eliminate the absence of a government guarantee on individual bonds or the loss-absorption risk of Tier 2. Fourth, if China's sovereign rating or outlook changes, CDB's ratings are likely to move in tandem.

It is also important not to accept the rating-agency view uncritically. CDB's low NPLs, capital, earnings and market access support the ratings, but the core of the ratings is government support. Strong government support allows CDB bond default risk to be assessed as low, but that does not mean investors can ignore CDB's standalone asset risk, margin decline, policy burden, Stage 2 balances, or the terms of foreign-currency bonds and subordinated bonds. Investors should use the rating level as a starting point and separately assess the ranking, guarantee, currency, maturity, liquidity and price of each security.

8. Credit Positioning

CDB's credit positioning is that of a quasi-sovereign financial issuer extremely close to the Chinese sovereign and a policy-bank benchmark issuer in the domestic bond market. It is not a Chinese government bond itself, but in the domestic financial bond market it is often treated as having quality and liquidity second only to Chinese government bonds. Therefore, CDB senior bonds have a credit feel close to Chinese government bonds, while the spread should reflect the fact that they are not government bonds, that they are issuer obligations, and that there are differences in instrument, liquidity and tax treatment. This report has not obtained live spreads, so it does not make a relative-value judgement.

Compared with other Chinese policy banks, CDB stands out the most for scale and infrastructure finance. Export-Import Bank of China is strong in trade and external economic cooperation, while Agricultural Development Bank of China is strong in agriculture, rural areas and food security. All three banks have high government support likelihood, but CDB is distinguished by the breadth of infrastructure, industrial policy and development finance, and by the issuance volume and liquidity of its domestic financial bonds.

Compared with the large state-owned commercial banks, CDB is weaker in deposit base and commercial-banking franchise, but stronger in the directness of government support and its policy mandate. ICBC, CCB, ABC, BOC and others have deposits, payments, international networks and regulatory systemic importance, while they are also affected by property, local government financing vehicles, NIM, deposit competition and TLAC. CDB is not a deposit-taking bank and therefore depends on the bond market, but its connection to the government as a policy bank is strong.

Compared with CDB subsidiaries such as CDB Leasing, CDB itself should be clearly placed above them. CDB Leasing is a financial leasing company 64.40% owned by CDB and benefits from high support expectations, but it has individual structural risks relating to lease assets, foreign-currency funding, keepwell arrangements, subsidiary guarantees and Tier 2 instruments.

9. Key Credit Strengths and Constraints

CDB's strengths are institutional proximity to the central government, a quasi-sovereign position in the domestic policy-bank bond market, low reported NPLs, large allowances and stable earnings. Its constraints are the low-profitability, long-duration and concentration risks created by policy mandates, dependence on bond-market funding, low ROA and low ROE, declining net interest income, and the gap between government support and explicit guarantee.

10. Downside Scenarios and Monitoring Triggers

CDB's main downside risk is, first, deterioration in China's sovereign credit profile or in the assessment of government support. Even if standalone NPLs remain low, a sovereign downgrade, failure to resolve local-government debt, concerns about financial-system stability, or a change in the support stance toward policy banks could directly affect CDB's rating, spreads and market valuation.

Second is credit deterioration in policy assets. Infrastructure, local-government-related projects, industrial policy, overseas projects and inclusive finance are supported by their policy importance in normal times, but if economic weakness, property adjustment, deterioration in local government finances, insufficient tariff income, project delays and overseas country risk overlap, they could appear in NPLs, Stage 2 and credit costs. The 2025 NPL ratio was low at 0.34%, but Stage 2 balances were RMB1.53tn, so latent risk remains.

Third is a continued decline in net interest income and deterioration in the bond-market funding environment. In 2025, net profit was preserved by lower credit costs, but if NII continues to decline and credit costs rise again, internal capital generation will be pressured. Because CDB funds most of its liabilities through debt securities, changes in regulatory treatment, a sharp rise in interest rates, lower market liquidity, or foreign investors' avoidance of China risk would directly affect margins and earnings.

Fourth is a reassessment of individual bond terms. CDB's own senior bonds have strong issuer credit, but investor protections differ for foreign-currency bonds, subordinated bonds, branch issuance and subsidiary bonds. If the market becomes more aware that the bonds are "not government-guaranteed", spreads could widen between different instruments within the same CDB group.

The main monitoring items are as follows.

The highest priorities for the next update are CDB's 2026 interim or full-year annual report and half-year financials, the latest rating-agency reports, offering circulars for individual foreign-currency bonds and Tier 2 instruments, supply-demand conditions in the domestic policy-bank bond market, and the direction of Stage 2 and credit costs. In particular, it is necessary to confirm whether the decline in credit impairment losses in 2025 was temporary, and whether the risk in policy assets is truly remaining low.

11. Credit View and Monitoring Focus

At present, CDB has among the highest-tier supported credit quality among Chinese financial issuers, as a policy bank extremely close to the Chinese central government. The direction is broadly stable, but it is more natural to see it as remaining high and flat as long as the Chinese sovereign, policy-bank framework, domestic financial bond market and policy-asset quality remain stable, rather than as an improving credit.

The most important basis for this view is integration with the government. At end-2025, all shareholders were government-related, and CDB is a policy bank that supports national strategy, infrastructure, industrial policy, the Five Major Areas, new-type policy-based financial tools and the Belt and Road Initiative. S&P's GRE list also classifies CDB as central-government-related, with a Critical role, an Integral link and an Almost certain likelihood of support.

The second basis is standalone financials and market access. At end-2025, total assets were RMB19.55tn, the NPL ratio was 0.34%, the allowance-to-loan ratio was 4.55%, net profit was RMB91.47bn, and the capital adequacy ratio was 12.81%. Declining net interest income and low ROA and ROE are constraints, but low NPLs, large allowances, stable earnings and access to the very large domestic financial bond market support issuer durability.

The assessment is constrained by the long-duration, low-interest and concentration risks created by policy mandates, Stage 2 balances, the upper bound on capital ratios, dependence on bond-market funding, and the limits of legal guarantees on individual bonds. In 2025, earnings were preserved by lower credit costs, but if future deterioration in policy assets overlaps with margin decline, the standalone financial cushion would be pressured.

For bond investors, the most important point is to distinguish CDB's own senior bonds, domestic financial bonds, overseas bonds, subordinated bonds, Tier 2 and subsidiary bonds. CDB's own senior credit is very strong, but not all bonds are directly guaranteed by the Chinese government. Tier 2 capital bonds have loss-absorption features even when issued by CDB itself. Subsidiary bonds such as CDB Leasing bonds benefit from parent support expectations, but carry lease-asset and structural risks distinct from CDB's own bonds.

As a practical use of this report, CDB's own senior bonds and domestic policy-bank bonds should be assessed as very strong supported Chinese quasi-sovereign core credits. By contrast, Tier 2, subordinated bonds, subsidiary bonds, and bonds issued by vehicles involving keepwells or guarantees require separate checks on security ranking, loss absorption, directness of guarantee, fund transfer and the issuer's standalone financials.

For investment decisions, CDB's own senior bonds can be treated as defensive core credits. However, this report has not obtained live spreads, OAS, CDS, or comparisons with same-tenor Chinese government bonds, policy-bank bonds or state-owned commercial bank bonds, so it does not make a relative-value judgement. Going forward, priority should be given to monitoring China's sovereign rating, NPLs, Stage 2, credit impairment losses, net interest income, the CET1 ratio, the domestic financial bond issuance environment, overseas bond terms, Tier 2 provisions and support structures for subsidiary bonds.

12. Short Summary & Conclusion

China Development Bank is a policy bank 100% owned by Chinese central-government-related shareholders and is a core quasi-sovereign financial issuer supporting infrastructure, industrial policy, the Five Major Areas, new-type policy-based financial tools and other policy priorities. At end-2025, total assets were RMB19.55tn, the NPL ratio was 0.34%, net profit was RMB91.47bn, and the capital adequacy ratio was 12.81%, so standalone financials also reinforce its supported credit strength. At the same time, profitability is low, most liabilities are debt securities, and government support likelihood is separate from an explicit guarantee on individual bonds; domestic financial bonds, overseas senior bonds, subordinated bonds, Tier 2 and subsidiary bonds therefore need to be reviewed separately.

13. Sources

Primary company and official sources

• China Development Bank, Annual Report 2025, SSE disclosure, approved and published 2026-04-30: https://static.sse.com.cn/disclosure/bond/announcement/common/c/new/2026-04-30/0000_20260430_V9MU.pdf
• China Development Bank, Annual Report 2024, official / cninfo PDF, published 2025-04-30: https://static.cninfo.com.cn/finalpage/2025-04-30/1223451316.PDF
• China Development Bank official release, "国家开发银行发布2025年度报告", 2026-04-30: https://www.cdb.com.cn/xwzx/khdt/202604/t20260430_13334.html
• China Development Bank, Our Mission, accessed 2026-05-20: https://www.cdb.com.cn/English/qywh/khsm/
• China Development Bank, Funding in China, accessed 2026-05-20: https://www.cdb.com.cn/English/ywgl/zjyw1/gnjr/
• China Development Bank, Foreign Currency & Financing Overseas, accessed 2026-05-20: https://www.cdb.com.cn/English/ywgl/zjyw1/wbjjwrz/

Rating and market-structure sources

• S&P Global Ratings, China GRE Ratings List, ratings as of 2026-04-30: https://www.spglobal.com/ratings/en/regulatory/article/china-gre-ratings-list-s101685114
• Moody's China sovereign A1 / stable action was checked through secondary reports dated 2026-04-27 to 2026-04-28 as sovereign-environment context. Moody's primary CDB issuer report was not obtained for this initial report.
• Bond Connect / ePrime news on China Development Bank Hong Kong Branch offshore RMB Belt and Road themed bond issuance, 2025-12-12: https://www.chinabondconnect.com/en/About-Us/News-Release/Eprime-Congratulates-Cdb-Hk-Branch-S-Belt-And-Road-Themed-Bond-Issuance-1.html

Internal working materials

• Internal writing plan, structured metrics file, and related issuer notes were used for drafting discipline and continuity. They are not public source documents.

14. Unverified / Pending

• Full Moody's, Fitch and S&P issuer-specific reports for China Development Bank, including latest outlook, support notching, downgrade triggers and individual debt ratings, were not obtained.
• Individual offshore senior note offering circulars, Hong Kong Branch drawdown documents, subordinated bond terms, Tier 2 capital bond terms, governing law, negative pledge, cross default, tax gross-up and acceleration language were not reviewed.
• LCR, NSFR, detailed liquidity reserve, unused committed facilities, currency-by-currency liquidity and detailed maturity ladder were not available in the reviewed public sources.
• Sector-by-sector NPL, Stage 2, restructured loans, overdue loans, local-government-related exposure, property-related exposure, policy financial tool / fund balances, investment recovery, capital consumption and country-risk exposure were not extracted in detail.
• Domestic CDB financial bond, China government bond, policy bank peer and offshore CDB note live yields, spreads, OAS and CDS were not available in this workspace; no relative-value conclusion is made.
• The official CDB international credit rating webpage appears to show outdated historical ratings and was not used as the current rating source.