China’s securities firms grow liabilities 36.6 percent as every other aggregate slows
Total assets of Chinese financial institutions reached 562.20 trillion yuan at the end of the second quarter of 2026, the People’s Bank of China reported on 3 September, an increase of 7.7 percent on a year earlier. Every component of that figure decelerated from the first quarter except the securities sector, which accelerated on both sides of its balance sheet, with liabilities growing 36.6 percent.
The securities line is small enough to be easy to overlook. At 20.37 trillion yuan it is 3.6 percent of total assets, on our calculation, against 497.98 trillion for banking institutions.
Every line slower except one
| Annual growth in assets | Q2 2026 | Q1 2026 |
|---|---|---|
| Total | 7.7% | 8.8% |
| Banking institutions | 6.6% | 8.0% |
| Securities institutions | 29.8% | 25.4% |
| Insurance institutions | 11.8% | 12.2% |
End of quarter releases published by the central bank and compiled from the National Financial Regulatory Administration and the China Securities Regulatory Commission. Banking institutions exclude the central bank and include overseas branches. Securities institutions comprise securities, futures and fund companies.
The same pattern holds on liabilities. Total liabilities of 514.48 trillion yuan grew 7.9 percent against 9.0 percent in the first quarter, banking liabilities slowed to 6.8 percent from 8.1 percent, insurance to 12.2 percent from 12.7 percent, and securities accelerated to 36.6 percent from 30.9 percent.
Liabilities are outrunning both assets and capital
Owners’ equity across all three sectors reached 47.73 trillion yuan, up 4.9 percent, the slowest growth of any headline aggregate and down from 6.3 percent in the first quarter.
For the securities sector specifically, liabilities grew 36.6 percent, assets 29.8 percent and equity 8.1 percent. Liabilities are therefore growing 6.8 percentage points faster than assets and 28.5 points faster than capital, on our calculation, which is consistent with a more liability intensive expansion and shows up directly in the assets to equity ratio below.
| Assets to equity | Q2 2026 | Q1 2026 |
|---|---|---|
| Banking institutions | 12.57 | 12.68 |
| Insurance institutions | 10.78 | 11.23 |
| Securities institutions | 5.04 | 4.79 |
Ratio of sector assets to sector owners’ equity, on our calculation from published levels. Securities firms remain the least leveraged of the three sectors, and the only one whose leverage rose over the quarter.
That is the finding, and it should be read carefully in both directions. Securities firms are levered at roughly 5 times equity against nearly 13 times for banks, so the sector is starting from a conservative position. But it is the only one moving away from that position while the rest of the system slows.
The central bank publishes the definition and the figures and offers no explanation of what drove the securities move. Because fund companies sit inside the classification alongside securities and futures firms, the line reflects both broker balance sheets and the asset management industry, and the release does not separate them.
The system added 5.86 trillion yuan in a quarter
Total assets rose from 556.34 trillion yuan at the end of March to 562.20 trillion at the end of June, an increase of 5.86 trillion yuan in three months, on our calculation. Equity as a share of total assets edged up to 8.49 percent from 8.41 percent, on our calculation. Assets less liabilities give 47.72 trillion against the 47.73 trillion published as owners’ equity, a rounding difference of 0.01 trillion.
For context, the central bank’s financial statistics report of 14 August put broad money growth at 7.7 percent at the end of July, with M2 at 355.51 trillion yuan, and outstanding aggregate financing to the real economy at 463.27 trillion yuan, up 7.4 percent. Aggregate financing flow in the first seven months was 22.25 trillion yuan, down 1.74 trillion on the same period of 2025.
Why it matters: The banking system is decelerating on assets, liabilities and capital at the same time, which is slower balance sheet expansion across an entire sector rather than contraction, since every line is still growing, and the aggregate financing flow figure points the same way with 1.74 trillion yuan less credit extended in seven months than a year earlier. Against that, one sector is expanding at nearly 30 percent on assets and nearly 37 percent on liabilities. Whatever is driving it, it is not the same force acting on the rest of the system, and it is happening in the part of the financial sector that intermediates market risk rather than credit risk. The scale caveat belongs alongside the growth rate: at 3.6 percent of system assets and roughly 5 times leverage, on our calculation, this is a small sector moving in the opposite direction to a much larger one. The central bank publishes no liquidity, interconnectedness or capital quality detail alongside these figures, so the release supports a statement about composition and not one about systemic risk.
Outlook: The end of the third quarter release, due around December, will show whether the securities acceleration is a two quarter pattern or a longer one, and the specific line to watch is whether equity growth of 8.1 percent starts to close the gap on liability growth of 36.6 percent or falls further behind. If leverage keeps rising from 5.04 times, the sector’s distance from the banking system’s 12.57 times narrows quickly at these rates. The second question is what the aggregate does: total asset growth has slowed from 8.8 percent to 7.7 percent in one quarter while broad money runs at 7.7 percent and aggregate financing at 7.4 percent, so the three measures have converged, and a further slowdown in the banking line would pull the system total below the money aggregates.
Sources: People’s Bank of China.
