Research On Capital Adequacy Ratio Of Shizuishan Bank

Capital management is a crucial issue to be solved in the management theory of China’s commercial banks, and meanwhile capital adequacy ratio management is also the essential part of the capital management. Whether Commercial banks’ capital is adequate or not, is not only related to the abilities of banks to resist risks, but also related to the safety of banking, moreover the stability of financial system.The Shizuishan Bank’s capital adequacy ratio is below8%, which is the minimum capital regulatory requirement since the beginning of the Shizuishan Urban Credit Cooperatives in2001, and then it has meet regulatory requirements until2006through increasing their capital and stocks. With the rapid business development and the diverse forms of capital supplement, including increasing their investment, adding strategic investors and so on, the level of capital adequacy ratio has been increasing year by year, which has reached15.67%in2011, higher than10.5%, the minimum regulatory capital requirements, and it also surpasses the commercial banks’weighted average capital adequacy ratio in2011.However, with the development of the Shizuishan Bank’s business and the needs of cross-regional development, it is still facing the capital adequacy ratio management problems,such as the capital stress, the irrationality of income structure and so on.In view of this, this article will analyze the current situation and problems of the Shizuishan Bank’s capital management combined the realities, then points out that we can supplement the capital from endogenous and exogenous ways, and establish a sustainable capital supplementary channel. Also this article claims that we should found a capital adequacy ratio management mechanism including the governance structure, policies and procedures, capital adequacy assessment process and so on, in order to ensure the accomplishment of the target of capital adequacy ratio management.