Corporate Update: Bank of Shanghai Co., Ltd. Announces Interest Payment Schedule for 2026 Convertible Bond

Bank of Shanghai Co., Ltd. (the “Company”) disclosed on 19 January 2026 that it has finalized the schedule for interest payments on its 2026 convertible bond, originally issued in 2021. The announcement detailed the timing of registration and coupon disbursement, as well as tax implications for foreign institutional investors.

Key Dates and Payment Mechanics

  • Interest‑payment rights registration: 23 January 2026
  • Coupon payment: 26 January 2026
  • Ex‑interest date: Coincides with the coupon payment date (26 January)

The bond will commence interest payments for the period covering 25 January 2025 to 24 January 2026 on the 26 January payment. No amendments to the bond terms or additional operational updates were mentioned.

Tax Incentive for Foreign Investors

In line with a recent policy adjustment, the Company confirmed that interest earned by foreign institutional investors on the bond will be exempt from corporate income tax and value‑added tax (VAT) through the end of 2027. This incentive aligns with broader governmental efforts to attract foreign capital and enhance the appeal of domestic debt instruments among international investors.

Analytical Context

1. Convertible Bond Dynamics

Convertible bonds combine fixed‑rate debt with an embedded equity option, offering a lower yield relative to straight bonds while providing upside potential if the issuer’s equity performs well. By registering the interest‑payment rights and scheduling the coupon, the Company adheres to regulatory requirements that safeguard investor interests and maintain market integrity.

2. Investor Appeal and Tax Efficiency

The tax exemption for foreign investors reduces the after‑tax cost of borrowing for the Company while simultaneously improving the net return for foreign participants. This aligns with the Bank of Shanghai’s strategy to diversify its investor base and tap into global capital markets, particularly in the wake of tightening domestic liquidity conditions.

3. Broader Economic Implications

The exemption reflects a continued policy trend in China aimed at stimulating investment and encouraging the development of a robust secondary market for corporate bonds. By lowering tax burdens for foreign investors, authorities seek to enhance the competitiveness of Chinese issuers relative to peers in other major economies. This move may also encourage greater participation from sovereign funds, pension funds, and asset‑management houses, thereby deepening capital market depth and liquidity.

4. Competitive Positioning

Bank of Shanghai’s proactive management of its convertible bond program demonstrates a disciplined approach to debt structuring, reinforcing its standing among China’s leading commercial banks. The firm’s ability to navigate regulatory changes, offer attractive terms, and maintain clear communication with investors positions it favorably against peers such as Industrial and Commercial Bank of China and China Construction Bank, especially in the increasingly competitive banking‑sector funding environment.

Conclusion

The scheduled interest payment and accompanying tax incentive represent a strategic effort by Bank of Shanghai to optimize its capital structure, enhance investor appeal, and comply with evolving regulatory frameworks. By maintaining transparency and operational rigor, the Company reinforces its credibility within the domestic and international financial markets.