Research On Listed Commericial Bank’s Bond Investmnet

According to the CBRC’s2013statistics, the total assets ofcommercial banks in China are more than150trillion yuan. The balanceof bond investments is more than20trillion yuan. Bond investments playan important role in commercial banking, including access to interestincome, gain from trading, regulating liquidity, hedging risks and use ascollateral, etc., With the continuous expansion of China’s bond market,and the deepening of financial reform, especially the process ofmarketization of interest rates, bond investment will play an increasinglyimportant role in the management of commercial banking. The analysis ofbond investment behavior of commercial banks has significance of theoryand practice.Industrial and Commercial Bank of China, Agricultural Bank ofChina, Bank of China and China Construction Bank, as the four majorstate-owned commercial banks, is an important component of China’sbanking industry. Both from the asset size, profitability or marketinfluence, the four state-owned banks may represent highly developeddomestic banks. Due to the large size of funds, these banks have formed acomplete range of risk control rules and the funds are managed by professional team. Therefore, the analysis of bond investment behavior ofour state-owned banks can also be applied to other domestic banks.The paper analyzes the four major state-owned banks rely on datapublished in their annual reports. The four banks are both A shares and Hshares listed companies. In accordance with Chinese accounting standardsand International Financial Reporting Standards, and both the regulatoryand exchange requirements, the banks need to disclose a lot ofinformation related to the bond management and in its annual report. Aslarge dual-listed banks, the relevant data have been audited by big fouraccounting firms and used by a large range of research agencies.Therefore, the data is of high authenticity and reliability which is thefoundation of this article.Finally, given the current Chinese Accounting Standards andInternational Financial Reporting Standards has been convergence, asmall caliber different data can also be converted within a reasonablerange, a large overseas listed commercial banks is selected to comparewith the four banks. Due to mature foreign financial markets haveachieved the interest rate liberalization, the outlook and suggestion willbe based on prediction on changes in our financial markets. On this basis,some recommendations are listed, including a reasonable proportion ofplanning four categories of financial assets, expanding the diversity of income sources, and improve the bank’s various risk management and toimprove the reliability of information disclosure.