Research On The Ultimate Ownership Structure Of The Commercial Banks In China

This paper does research on the ultimate ownership structure of China’scommercial banks with the research method of the ultimate ownership, points outexisting problems, and puts forward solutions.Firstly, the paper introduces the practical basis, literature and theoreticalbackgrounds of the study on the ultimate ownership structure as research object.Realistically, China’s commercial banks have gained a great many achievementsthese years, but many operational problems such as imperfect corporation governanceand extensive type of development still exist. Therefore this study provides thetheoretical basis to solve these problems. Meanwhile, in the aspect of the state-ownedfinancial assets management, there exist problems such as the disunity between theresponsibility, the rights and the interests, the disunity between the assignments ofpersonnel, management domain and the assets managements, and the unclearcharacters of the government as the public administrator and the owner of thestate-owned financial assets. To solve these problems, the distribution ofthe state-owned financial assets in the commercial banking shall be figured out. Inliterature, the studies on the ownership structure contain three parts: the analyzingmethods, the description of the ownership structure in different enterprises fromdifferent countries, and the correlations between the ownership structure and otheraspects concerned. With the ultimate ownership structure analyzing method, thisstudy not only develops the research on the ownership structure but also expands therange of application of this method, which provides references for studies concerningother industries and enterprises. In theory, the author introduces the principal-agenttheory, which is the theoretical basis of this study, underlying the development of thetheory and relationship with ownership structure. Secondly, the research object, data source and methods are introduced. Theauthor did research on the annual reports of107sample commercial banks to gainownership structure information, and employed the ultimate ownership analyzingmethod to analyze their ownership structure. To fully elaborate this method, theauthor took China Bohai Bank as an example to describe its ownership structure bycalculating the ultimate ownership structure.Finally, the author concludes the research results with policy advices proposed.In order to illustrate the status of ownership structure, the author divided the107commercial banks into seven levels, and illustrated the current situations. It isconcluded that the ultimate ownership has a relatively high concentration and aconsiderable quantity of state-owned equity, the largest shareholder of most banks arethe government and these banks rarely have foreign strategic investors. To solve theseproblems, the author suggested to introduce the ‘golden shares’ mechanism,encourage more private capital to invest in commercial banks and take goodadvantage of foreign strategic investors. Therefore the ultimate ownership structure ofChina’s commercial banks will be diversified and this will lay the foundation forthe improvement of corporate governance structure.