Analysis On Current Situation Of Refinancing Behavior In Chinese Banks

With the continuous development of China's economy and the gradual deepening of economic reform and opening up, the market system is gradually established and the bank's system reform is also implemented. The banking has become one important of the macroeconomics, therefore its governance problem and behaviors have received much attention. With the deepening of financial reform, China's commercial banks will face more attention from home and abroad. Therefore, how the commercial banks continue to improve our capital structure, reduce bank risk, increase their ability to cope with risks is an important issue. Industrial and Commercial Bank, Bank of China, Shanghai Pudong Development Bank, Construction Bank, Bank of Nanjing and other listed banks have recently announced refinancing programs. With this background, the paper make analysis of China's listed banks refinancing as a background analysis of China's listed banks refinancing behaviors.Based on the theoretical analysis and literature review, this paper uses statistical data to analyze the status quo of China's bank refinancing and compare the different ways of refinancing in order to reasons of bank refinancing and the market reactions. Through our statistical study, we Find that the bank refinancing is mainly due to the falling of commercial banks' capital adequacy ratio, which limits the banks ability to withstand risks and the ability to expand, rather than the banks want to reduce non-performing loan ratio. By the use of event study, we analyzed the market reactions for banks to refinance. From the abnormal returns perspective, we find that the market react negatively to the refinancing announcement for allotment but no such reaction in the convertible bonds refinancing announcement. And there is a negative reaction for the announcement of specifically allotted shares in the announcement day. But from the cumulative abnormal returns perspective, the market has a most significantly negative reaction to the allotment refinancing announcement and it lasts for a long time. There are also significantly negative responses for other two ways of refinancing behaviors. But the reaction of the market to the convertible bonds refinancing announcement is relative lower and the reaction to the specifically allotted shares announcement is very fast and the recovery of the negative reaction is also very quick. From the whole reaction, we find that the market reacts significantly negatively to the refinancing announcement. Based on our study, we believe that in order to improve the refinancing of listed banks, we should improve the internal governance system and increase the refinancing channels to protect the investors' interests.