A Study On The Financial Effect Of Perpetual Bond Issued By Joint-stock Commercial Banks

In recent years,the government has been taking various measures to support the development of the entity economy,while also actively reducing the leverage of the financial system.As an important part in the financial market,commercial banks are also facing increasingly stringent regulatory requirements while assisting SMEs in financing.Capital is significant to resist risks for commercial banks,so they urgently need flexible and diverse financing channels to face increasingly stringent regulatory measures.In January 2019,first non-fixed-term capital bond was successfully issued by Bank of China in financial market,thus opening the door to the bank’s perpetual bond market.This thesis adopts the form of case analysis and selects the joint-stock commercial bank that issued perpetual bonds,namely Minsheng Bank,as the main body of this case analysis,in order to explore the financing effect of perpetual bonds of joint-stock commercial banks.Firstly,the thesis introduces the characteristics and comparative advantages of perpetual bonds,and outlines the basic theory of financing.Secondly,it presents the background of bank perpetual bonds in the aspect of policy,and clarifies the current status of capital supervision in the banking industry and the development of the perpetual bond market.Next,it analyzes the motives of Minsheng Bank’s issuance of perpetual bonds,which helps us to understand the background and process of the issuance of perpetual bonds.Finally,the thesis selects four aspects including cost-benefit,short-term market effect,medium-term financial performance and business performance evaluation to evaluate the financing effect of Minsheng Bank’s issuance of perpetual bonds.Combined with the above analysis,the research conclusions could be summarized,and the thesis also put forward corresponding policy suggestions for the orderly development of the perpetual bond market in the future.Combined with this case analysis,this thesis finds that the issuance of perpetual bonds can indeed bring positive effects to the banking industry.The conclusions are as follows.Firstly,from the perspective of cost and benefit brought by perpetual bonds,Minsheng Bank’s use of perpetual bonds for financing is conducive to reducing weighted average capital and increasing earnings per share.Secondly,from the perspective of short-term market effects,the issuance of perpetual bonds has had a positive impact on the performance of Minsheng Bank in the security secondary market.Thirdly,from the perspective of medium-term financial performance,the issuance of perpetual bonds can improve the financial statements of Minsheng Bank.Finally,with the help of factor analysis,it is found that the comprehensive business performance evaluation of Minsheng Bank has been improved after issuing of perpetual bonds.In order to promote the development of the bank perpetual bond market,this thesis puts forward several suggestions and measures.Above all,from the perspective of the regulator,it is necessary to improve the information disclosure and supervision mechanism to alleviate the phenomenon of information asymmetry.In the secondly place,as the issuer,it is necessary for them to continuously enrich the terms of perpetual bonds and expand the financing market,which is helpful for reducing the interest rate level and improving the capital replenishment capacity of perpetual bonds.In the end,from the perspective of investors,it is necessary for them to make full use of market information to maintain a rational attitude and choose appropriate investment in perpetual bonds.