The Relationship Study Between The Subordinated Debt Issuance And The Capital Structure Of The Commercial Bank

The commercial bank has always been important to the development of the national economy, asthe main body of modern economic and financial steady development, it becomes very important to.Especially since the economic globalization, China’s accession to the international operation, with Chinacharacteristics of the commercial bank operation can withstand external challenges, coupled with the newBasel agreement rules on capital requirements, the Commercial Bank of our country faces capital shortage.And the development of capital theory, especially the commercial bank capital optimization theory, tells usthe importance of optimizing capital structure. While the subprime as supplementary capital subsidiarycapital in the capital structure, to make the capital adequacy ratio up to international standards.In this paper, the capital structure of commercial banks and subordinated debt financing withbasic knowledge, through the status analysis of subordinated debt issuance and the capital structure of thelisted commercial banks of our country15home, and we know： the capital structure of Chinesecommercial Banks serious deficiencies. First of all, from the aspects of financial leverage, the our countrycommercial bank’s equity multiplier ratio is big, this mainly because of increased equity and deposit foreach year, one of the owners’ equity increases as the increase of the debt, in addition, the increasing scale ofcredit of commercial Banks is to improve the commercial bank assets, and assets term mismatch problemsaffect the existence of sufficient funding and liquidity of commercial Banks, at the same time, the higherthe financial leverage will increase the financial risk of the commercial Banks. Secondly, in terms ofdeposit structure, our country commercial bank deposit is higher, unreasonable debt structure, demanddeposits increase higher than time deposits. Deposits a higher proportion of the serious influence theliquidity of commercial Banks, the lack of long-term funds support, is not conducive to the rapid expansionof credit scale of financial support. Again, look from the owner’s equity structure, excessive proportion ofstate-owned commercial Banks business equity in our country, the low proportion of capital reserves,retained earnings is low, and other non-state excessive proportion of Banks’ capital reserves. Thedevelopment of China’s commercial Banks too much attention to equity capital source, and ignore theaccumulation of retained earnings, is not conducive to commercial Banks internal financing strong support. Finally, from the perspective of regulatory capital, our country commercial bank capital adequacy ratio andcore ratios are faced with the unstable performance. This shows that the existence of the commercial bankcapital regulation, makes the commercial bank is wanton more equity and savings to meet or even surpassindicators, and ignore the risk of the bank itself to accumulate, exacerbating the bank internal termmismatch problem and liquidity risk, go against the market competitiveness and sustainable and healthydevelopment of commercial Banks.In addition, the commercial Banks issuing subordinated debt can improve the capital structure ofthe commercial bank’s internal financial liabilities structure, raise the commercial Banks, financial leverage,improve the bank’s own value and competitiveness; Supplementary capital, especially the attached capital,to meet the regulatory capital requirements prescribed by the state; To strengthen the market discipline,whether direct or indirect market constraints, can bring commercial bank the development opportunities;Broaden the investment channels, especially institutional investors, with relatively strong credit ofcommercial bank as the basis, can bring confidence for investors, to avoid the problem of difficult to repaythe principal and interest, at the same time, the whole financial market with strong confidence, standardizethe market development. But the shortcomings of commercial bank subordinated debt also nots allow toignore. The amount of the commercial Banks issuing subordinated debt, relative to the bank deposit islarger proportion, supplementary capital shortage, difficult to long-term support Banks credit demand andthe requirements of the regulatory capital standards set by the state; Subordinated debt rise late,institutional investors too little, basically is the major commercial Banks to buy each other commercialbank subordinated debt, investment philosophy; Other commercial Banks to meet the regulatory capitalstandards set by the state, from issuing subordinated debt capital requirements, issued by the industrial andcommercial bank, issuing amount is more and more big, the coupon rate is higher and higher, the Banksthemselves bear the heavy repayment of principal and interest of the risk.The indexes of subprime assets capital structure issue number and commercial banks areanalyzed, the relationship between them, and puts forward some relevant suggestions on subprime bonds.As their relationship: commercial banks to issue subordinated debt and financial leverage (equity multiplier)relationship is different from state-owned properties of different; subordinated bonds of commercial banksto issue some improvement on the deposit structure; issuing subordinated bonds of commercial banks and retained earnings rate is inversely proportional to the commercial banks to issue subordinated bonds; andthe first major shareholder is inversely proportional to the ratio between the fifth major shareholders; andthe proportion of state-owned properties also vary.Therefore, commercial banks can exploit the relationships between financial capital structure andthe issuance of subordinated bonds of a reasonable standard of subordinated bonds issued. In the aspect offinancial capital structure, whether state-owned property, a reasonable set of financial leverage, improvetheir value; a reasonable set of deposit ratio, the positive development of subordinated bonds to strengthendebt management; increasing profit retention rate, subordinated bonds issue size of reasonableconfiguration, so that the two investment channels complement each other, together play a role, increase thecommercial bank the flow of funds, improve the value and competitiveness of commercial banks.