A Research On Bond Assets Allocation Strategies Of Small And Medium Banks

Small and medium banks are important part of the domestic banking industry.There are more small and medium banks than the national joint-stock banks in China,with small assets and strong regional feature.In recent years,the domestic bond market has developed a lot.At the same time,domestic interest rate marketization process has accelerated.In addition,the commercial banks have developed rapidly.Due to all the factors above,the bond assets become small and medium banks' important component of non-credit assets.Therefore,the bond assets'performance will make a direct affect on the profits of the small and medium banks.Small and medium banks tend to expand their bond assets and hold them to maturity.Bond business is not valued enough or managed well in small and medium banks.But as the stricter regulation and the tighter market liquidity,blind expansion can not last.Small and medium banks should focus on bond assets allocation strategies,to support the development of bond investment.Further,the small and medium banks should enhance the bond assets profit levels by improving the internal management of the business.Firstly,this paper states the existing bond assets theories,theories of assets allocation,ect.Secondly,this paper analyzes the domestic bond market development background,and chooses commercial banks as the main research targets.The targets are the 5 listed banks,with the asset size below 150 billion yuan,and Chinese Mercantile Bank in addition.And this paper states the present situation of the underlying banks.Thirdly,based on the trade purpose,the current assets allocation strategies and the operating characteristics,this paper studies and demonstrates bond assets allocation strategies.Mainly,this paper concludes with the size and time of the trades,as suggestions on bond assets allocation to small and medium banks.Finally,the paper states the problems in the internal management of the small and medium banks and makes the relative suggestions,taking Chinese Mercantile Bank as an example.The paper,on the base of the bond assets allocation strategies,forms a set of distinctive trade analysis methods for small and medium banks.At the same time,focusing on the question of small and medium banks' internal management,in Chinese Mercantile Bank especially,the paper provides the relative suggestions.