Research Of The Equity Structure's Influence On The Financial Performance Of Village Banks

Village bank is a new kind of rural financial institution in China.It provides funding for farmers,small-sized and medium-sized enterprises through entering county rural financial market.Village bank aims to improve their life quality,enlarge production and relieve the problem of "loan difficulty".The current develop status,management mode,ownership structure and market position have caused general concern in the field of academia and financial field.So it is significant to conduct a comprehensive and systematic research on the above problems of this emerging rural financial institution and lay the foundation for the later development.System of main sponsors and introducing private capital are new trends of the village bank ownership structure.Village bank can make a quick development with the guide of main sponsor bank,private capital can also activate the rural financial market.But there is also another view that main sponsors will be absolute shareholding which may restrain the invest activity of other investors.It will make village bank become the branchs of the main sponsors.Natural person and corporate shareholders do not realize the supervisory function.Yet other kinds of bank can also sponsor their village banks which increase the quantity of village bank but not the quality improvement.So it is necessary to study the rural bank ownership structure systematically and design optimization scheme.In order to solve the problems based on angle of village bank ownership structure,this paper is including five parts:the first part introduces the theory about influence of ownership structure on the performance.This part set a hypothesis through reviewing OGBP conduction theory,principal-agent theory and the theory of relative market power which are related to corporate management.According to previous research on banking,it shows that central level of equity can affect performance through three ways including positive effect,negative effect and U-shaped effect.The second part analyzes the current management status of Jiangsu village bank through data,clarify the characteristics of village bank ownership structure and running performance in recent years in reality.Analysis stated that village bank exists such develop features like "highly centralized equity","pyramid phenomenal","private capital introduction".The third part studies the influences of village bank ownership structure on performance through correlation analysis.Empirical study results show that rural commercial bank as the main sponsor bank can promote the performance of village Banks,and natural person,legal person,shareholders do not have significant effect on performance as their enthusiasm is not high.In addition,village Bank improves the profitability as the operating time goes.In the early stage of market development,highly centralized equity can suppress its financial performance.The fourth part tries to discuss how equity structure affects performance by asset allocation through a case.Here three typical village banks in Jiangsu were selected to analyze the equity structure,credit funds flow and performance in recent years.Finally optimizing the policy,including the following:(1)handling the relationship between sponsor bank and village bank correctly,optimize management-control model.(2)improving the non-bank investment subject ownership limits.(3)introducing the local management.(4)increase proportion of non-interest income,develop scale of intermediate business.