The Financial Effect And Motivation Analysis Of Bank Of Ningbo's Private Placement

Since twenty-first Century,commercial banks not only expand rapidly on the scale,but also go public one after another,making it possible to raise a larger amount of capital.Basel Accords,the sword of Damocles,is stilling hanging above those bankers' head.For the development of business,commercial banks must have a more efficient way to refinancing to meet their capital needs.Private placement is extremely welcomed by commercial banks,most because of its low threshold and conveniency.There are some theories about the relationship between private placement and corporate performance,such as supervision effect,information asymmetry and agency cost theory.However,there are some negative impacts as well.Through the manipulation of the issue price,making cash allocation policy high,and the injection of inferior assets,large shareholders often gain the tunneling benefits,thereby affecting the longterm development of the business.This paper chooses the private placement of the Bank of Ningbo completed in the fourth quarter of 2010 as a case study.Through a comparative study of the Bank of Ningbo before and after the completion of the private placement,ranging from performance evaluation and market reaction,we make sure how the private placement influenced the Bank of Ningbo.Additionaly,based on relevant data of industry of other banks,we complete a industrial comparison as well.At the same time,through the relevant literature research,analysis of the company's official and unofficial analysis report and summarize the study,the Bank of Ningbo to choose private placement as a means of financing motivation analysis report,and draw some valuable conclusions and suggestions.In the case analysis part,we firstly analyze the motivation of Ningbo bank's private placement,and then analyze the financial effect of Ningbo private placement from short-term to long-term.Through this case study,we can draw the conclusion that Ningbo's private placement has the market environment factors and the inner factors of the shareholders themselves.The financial effect,although the private placement does not bring short-term wealth growth to shareholders,but in the long term to the company has a positive financial effect.Now,more and more listed commercial banks choose private placement refinancing,but aside from this phenomenon,they need to pay attention to the decisions they made.Through the combination analysis of short-term performance and long-term performance,there could be a positive evaluation method.The conclusion of this study is to provide a reference for the future companies and investors when they need to refinance.