Research On Improvement Of Ownership Structure Of LJ Bank

Commercial banks play a vital role in Chinese financial market.With the pace of the shareholding reforming in banking industry,the ownership structure becomes more productive;the proper ownership may result into the better performance.Besides,more and more international banks open its branch in China;local Chinese banks confront fiercer competition.In order to obtain an advantage edge,Chinese banks have been forced to improve its business results by all means including re-constructing its ownership structure.This thesis aims to find out the existing problems regarding ownership structure of LJ Bank,and hence to offer suggestions that may work.State-owned commercial banks in the governance of the board of directors are serious administrative;the low interaction efficiency of the board of directors and supervisors;managers are lack of effective incentive-constraint mechanism that they focus on chasing the rights of control and make it strong;cooperating with inappropriate strategic investors and other issues.These issues influence LJ's banking efficiency seriously.This paper starts with the literature review of the relationship between banks' performance and its shareholders' structure,and the author applies the theory to the empirical analysis to LJ bank.The author points out the remain problems of LJ banks,such as virtual shareholders meetings,board policy not been being carried out,poor performance and so forth,some of these result from the biased share structure such as the highly concentrated holders structure especially state-owned shares,proxy problems,the lack of useful motivation mechanism for management team.And as a conclusion of the analysis,some useful measurements are mentioned to optimize the shareholders' structure:balanced percentage of share structure,the introduction of strategic investors,establish of long-term motivation organism.