Shenzhen Development Bank, The Introduction Of Foreign Strategic Investors, Case Studies

Banking has very close relationship with economy. With the development of China's economy, our banking industry faces flinty challenges. Reforming the banking system is a positive strategy to face the challenges, and introducing overseas strategic investors into our commercial banks is an important step of the reform. Since China joined WTO, our banking market has been becoming more and more open, and the step of foreign financial institutions investing in our commercial banks has sped up. Up to the end of October 2007, there are 35 foreign financial institutions which have invested 21 billion dollars in our 25 domestic commercial banks. Considering the intense attention on introducing overseas strategic investors into domestic banks and the great impact on our banking industry, we need to study on overseas strategic investors.Firstly, this thesis summarized the literatures on introducing strategic investors. It introduced the achievements from overseas research on the positive impact on competition, economy and resource allocation when getting strategic investors, and gave a brief description on the debate on introducing overseas strategic investors into our banking industry.Then, this thesis put the focus on the case of Shenzhen Development Bank (SDB) attracting overseas strategic investors. On one hand, it analyzed the reasons for SDB to fetch in overseas strategic investors and motivations for overseas investors to invest in SDB, and introduced the tactics to attract overseas investment. On the other hand, it studied the changes in organization structure and operation process after SDB got foreign strategic investment.Finally, the thesis analyzed the performance after SDB got overseas strategic investors. The results indicated that the competence of profit earning has been enhanced, the quality of asset has been improved, and the capital adequacy ratio (CAR) has no significant difference with other compared commercial banks. The results showed that SDB achieved its objectives by accepting the overseas strategic investors and gave a positive answer to the debate on whether our commercial banks should attract overseas strategic investors.The contribution of this thesis is giving an affirmative answer to the debate on whether our commercial banks should accept overseas strategic investors via the case study on SDB and providing some criteria and strategies for our commercial banks. By analyzing the performance of SDB when accepting overseas strategic investors with ratio analysis, the thesis showed that SDB enhanced its capital adequacy rate, optimized its operation structure and improved its management performance.