Study On The Listing Of Chinese City Commercial Banks

From 1995 the first city commercial bank—Shenzhen City Urban Cooperative Bank (now Ping An Bank) has been established, the city commercial banks in China has gone through 20 years of development. City commercial bank has becomed the third echelon of China’s banking industry, following after the five state-owned commercial banks and 12 joint-stock commercial banks, and it is an indivisible part of the main body in our country’s modern banking system and an important part of regional financial strength. During this period, part of the city commercial banks realize steadily great development through capital market, and after listing, city commercial banks expand their scale rapidly, integrated management steadily, and improve its brand image gradually, which are referential significant for the development of the existing city commercial banks. As economic development has entered a new normal (in economic structure symmetry states based on sustainable economic development), more and more city commercial banks try to list in the capital market (until now 3 city commercial banks had listed on the mainland, and 7 city commercial banks had listed in Hong Kong SAR), and at the same time the listed policy in our country changed from examination system to registration system gradually, and the development of listed city commercial banks become an important part of China’s financial reform. Therefore, this paper selects the listed city commercial bank of China development as the point of research.This paper argues that as a regional financial subjects, the city commercial bank achieve its sustainable development through listing not only for the city commercial banks benefit and will generate great help to the development of local economy, which is mainly reflected in two aspects:from the aspect of macroeconomic perspective, the listing of city commercial banks have positive significance for the development of the local economy and finance, which not only helps to enhance the visibility of the city commercial bank, but also can promote the development of local economy, especially boost the development of economic transformation directly, improve the third industry in the local economy development, and increase sustainable growth capacity and their employment tax; from the micro perspective, the listing of city commercial banks can not only promote the acceleration of reform and transformation of the city commercial banks, but also increase its financing channels, reduce its financing costs, increase information transparency, and improve their risk prevention and control capabilities.The innovation of this paper is mainly reflected in the following three points:1. this paper is a new topic. The existing literature is limited to the original economic and financial background, and there are rare research under the new normal background, especially in the three overlay (growth rate shift period, the throes of structural adjustment and pre stimulus digestion period) and the change of listed policy, and some city commercial banks had already been listed in Hong Kong stock market. In the view of the existing financial framework, most of large state-owned commercial banks and joint-stock commercial banks have already been listed, and the market development of city commercial bank, which is Chinese third echelon in banking system and regional financial main force, is an important part of financial deepening in China. Therefore, we chooses this topic to research; 2, we selected a new perspective. The existing literature research mainly concentrated on some specific indicators of changes in the micro level studies (mainly the changes of some specific indicators), and this paper we study city commercial bank’s development under the background of the new normal economic, and look into city commercial banks listed questions from the combination of macro and micro perspective; 3, in order to avoid the limitation of single analytical method, we adopt multi analysis methods. This paper uses SWOT method to analysis the advantages and disadvantages, opportunities and challenges in the process of the city commercial banks listed, and uses comparison method analyzing the main business development, financial index and stock price trend, and use EVA model to making the empirical analysis of the differences between city firms before and after listing, and also use DEA analysis and panel data analysis to view the efficiency differences. The inadequacy of the paper is that financing by listing of city commercial banks is a systemic problem, which not only covers their own development of the city commercial banks, but also relates to the transformation of the development of regional economy and the related regulation and supervision system. Due to the limitation of time, for the changes that related to the transformation of regional economy development and related to regulation and supervision system, also need to be proceeded in further research.This paper is divided into six chapters, the specific structure of this paper are as follows:The first chapter is an introduction, mainly introducing the research background, the significance, the theoretical basis and domestic and foreign research progress, and carries on the summary. Existing literature mainly focus on the following aspects:1, city commercial bank’s performance improvement and the enhancement of efficiency; 2, the city commercial bank’s ownership structure and corporate governance issues; 3, city commercial bank’s strategic positioning.The literature is limited in the development of listed city commercial banks, and this phenomenon is more obviously especially under the background of new normal time and national macro financial reform. Therefore, this paper selected this angle, comprehensively using the SWOT analysis method, comparison method and EVA analysis and panel data analysis, trying to conduct a research on problems of city commercial banks listed from micro finance and macro financial reform perspective. At the same time, this part also introduces the innovation and inadequacies.The second chapter is an overview of listed urban commercial banks. Firstly, this chapter introduces the status of city commercial bank’s development as a whole,; secondly, summarize the listing process of our countries’ city commercial banks, and until now, there as 10 urban commercial banks that has already been listed in mainland or Hong Kong SAR. And then carried on the analysis to the purpose of city commercial banks listed, embodying to increase its capital, to enhance their own reputation, to optimize the ownership structure and corporate governance structure, to enhance the ability of risk prevention and control, to realize the interaction of local economy and the financial position, and to benefit to refinance. Finally, explain the place and route and mode of city commercial banks listed. In the part of place, we mainly introduce the listed conditions of capital market in the mainland, Hon Kong and the United States, and in the part of listing mode, we explain the ones of individual bank listing, joint restructure listing and bank holding listing mode, and in the part of listing way, we describe the apply pattern and shell listing pattern.The third chapter is the analysis of the influence of the city commercial bank listed, and it is the qualitative analysis of this paper. Firstly, this chapter analyzes the impact on its own business development of the listed city commercial banks, mainly reflected in three aspects:1, capital asset expansion,2, business performance improvement,3, brand demonstration effect establishment; secondly, analyzes the impact of city commercial banks listed on the financial development of local economy; and after that, do SWOT analysis on the city commercial banks listed, further elaborated the advantages and disadvantages, opportunities and challenges, and its advantages are mainly located in its geographical, which make it easier to access to the local government and the financial support, and the characteristics of the service could satisfy the special needs of regional customers. The main disadvantage is its weak capital strength and is vulnerable to local economic development Finally analyzed and summarized the difficult and key problems in the process of city commercial banks listed.The fourth chapter is the comparison analysis on the listed city commercial banks, mainly includes four aspects of content, one is to compare and analyze the change of income structure, second is to compare and analyze the main financial indicators, third is to compare and analyze the main business indicators, and the fourth is to compare and analyze the trend of stock prices. This paper believes that from the preparation period of listing, the city commercial bank’s main business has made considerable progress steadily, and compare with the banks listing in Hong Kong SAR, business development of the city commercial banks listing in the mainland is more comprehensive and balanced, and the increase in non-interest income is more obvious; and this paper argues that overall development situation of the listed city commercial banks is good through the comparison of the loan-to-deposit ratio, profit margin of total assets,capital adequacy ratio, non-performing loan ratio, provision coverage ratio, total assets, total liabilities, and total amount of intermediary business of the 10 listed city commercial banks, especially the city commercial banks listed on the mainland developed better; and after listing, the city commercial bank stock prices are generally good, mostly stable above their issue prices, the stock price of the city commercial banks listed in mainland fluctuated more largely, compared with the stable stock prices of the city commercial banks listed in Hong Kong SAR.The fifth chapter makes an empirical analysis on the changes of the performance and efficiency of the city commercial banks listed. First, analyze the impact on the performance of city commercial banks through the economic value added model (EVA). It is found that the return rate of EVA before 2008 is obvious different from the return rate of EVA rate after 2008, and three A-share city commercial banks—Beijing Bank, Nanjing Bank and Ningbo bank, whose EVA value show a more obvious upward trend after listing, and from the fluctuation comparison on the EVA after 2007 with the EVA before 2007, it can be seen that the EVA value has an accelerated trend after listing, and this paper argues that listing has a positive impact on the performance of city commercial banks. Secondly, this paper analyzes the impact of the listing on the efficiency of city commercial banks by using the DEA model and the panel data analysis method. The research is from the angle of input and output, combining with the related macroeconomic environment factors, selecting the different indicators from macro and micro levels. Through the analysis, it is found that in the selected sample of urban commercial banks, listing has a positive significance on enhancing the efficiency of city commercial banks, embodying in the asset scale growth, non-performing loan rate control, improving the capital adequacy ratio, return on total assets rate of growth and income structure improvement and other aspects.The sixth chapter is the listed choice strategy of city commercial banks in future.First of all, this paper gives some suggestions about the timing, location, mode and way of city commercial banks listed. This paper argues that the city commercial banks should choose listing on the time that the macroeconomic situation, the real economy and its development is good and government do support; and mainland capital market should be the preferred choice for city commercial banks, and the city commercial banks who are eager to finance can choose listing in Hong Kong, and city commercial banks with international perspective can be considered to list in the United States; and the city commercial bank with different strength should adopt different listing mode, and the city commercial banks that have strong strength could list separately, for some relatively weak strength city commercial banks can try to take the joint reorganization; at the present stage, applying to list is the main way for city commercial banks, and for city commercial banks that are relatively weak, can try to take advantage of Shell listed approach. Secondly, this paper gives some necessary measures on proposed listing of city commercial banks shall take from two aspects of internal and external, and its internal strategies include:perfecting corporate governance structure, improving the risk management mechanism, regulating the introduction of strategic investors, establishing a good corporate culture; and its external strategy include:reducing local government administrative intervention, formulating reasonable economic financial policy, stabilizing policy expectations and so on. At the end of this paper, the research of this paper is summarized and some suggestions are given, and the future research is prospected.