Abstract Under the pressure of increasing capital replenishment, the pace of commercial banks' “blood-filling†for themselves has never stopped. On the one hand, this year, a number of listed banks have been brewing to replenish capital through convertible bonds and stock-issued private placements;...
Under the pressure of increasing capital replenishment, the pace of commercial banks' “blood-filling†for themselves has never stopped. On the one hand, this year, a number of listed banks have been preparing to supplement capital through convertible bonds and stock-issued private placements; on the other hand, preferred stocks and secondary capital instruments also play an important role as the main external channels for banks to replenish capital. .
According to industry insiders, at present, although the growth rate of the real economy has rebounded, the endogenous power of the supplementary capital of the banking system has not been completely repaired. Factors such as interest rate spread and asset quality will have an important impact on the development of banks. Banks' capital replenishment demand is still urgent, especially It is affected by the strictening of supervision. The supplementary pressure of bank capital this year is obviously larger than that of previous years.
The key listed banks will be over 100 billion convertible bonds to be issued on July 29, according to Ping An Bank’s plan to publicly issue no more than RMB 26 billion A-share convertible corporate bonds (hereinafter referred to as “convertible bondsâ€). The convertible bonds issued are worth 100 yuan each and are issued at face value. The duration of the bonds is 6 years from the date of issuance, and the convertible bonds are used to supplement the core tier 1 capital. The issuance plan still needs to be reviewed by the shareholders meeting and approved by the China Banking Regulatory Commission and the China Securities Regulatory Commission. Industry insiders expect that the convertible bond is expected to be completed by the end of this year or early next year.
In March of this year, Everbright Bank's 30 billion A-share convertible bonds were issued. At the same time, the issuance of convertible bonds by a number of banks is in the process. On June 9, Jiangyin Bank was approved by the China Banking Regulatory Commission to issue RMB 2 billion convertible bonds. On June 16, Minsheng Bank's shareholders' meeting passed the plan of issuing 50 billion convertible bonds. On June 21, Changshu Bank was approved by the China Banking Regulatory Commission. On the 5th of July, Wuxi Bank's 3 billion yuan convertible bonds were accepted by the CSRC; on July 11, CITIC Bank was approved by the China Banking Regulatory Commission to issue 40 billion convertible bonds. In December last year, the Jiangsu Bank Shareholders' Meeting also passed a plan to issue a convertible debt of 1.2 billion yuan. According to incomplete statistics, the size of convertible bonds that listed banks will issue in the future will reach 125.2 billion.
The bank's exogenous supplementary capital channels mainly include the issuance of common stock (IPO, fixed increase, allotment), the issue of preferred stock, the issuance of capital bonds, and the issuance of convertible bonds. Since the convertible bond itself cannot replenish capital, it can only replenish capital after it is converted into ordinary shares. Therefore, convertible bonds are not a more common choice for banks when they replenish capital.
Xu Chengyuan, chief analyst of rating agency Oriental Jincheng, said in an interview with the Economic Information Daily that the issuance of convertible bonds is relatively demanding, and that the convertible bonds generally take about one year from the announcement to the completion of the issuance, plus after the issuance. It is not possible to convert shares within six months, and it will take a year and a half to replenish the capital. At the same time, if the stock price of the bank is higher than the agreed conversion price, the investor will choose to convert the stock, so there is uncertainty.
However, it is worth noting that in February this year, the CSRC issued the “Regulations on Guiding and Regulating the Financing Behavior of Listed Companiesâ€. This new regulation has a certain degree of “encouraging†effect on the issuance of convertible bonds. Xu Chengyuan said that this new regulation imposes many restrictions on the application for additional issuance, allotment of shares and non-public offering of shares by listed companies, and the issue of convertible bonds is not yet covered. At the same time, compared with other capital instruments such as fixed-income and share allotment, the issuance of convertible bonds is more convenient and the issuance risk is smaller.
Xiong Qiyue, a researcher at the Bank of China International Finance Institute, said. "The main reason for the issuance of convertible bonds now is that it can supplement the core Tier 1 capital, and the stock price has stabilized and rebounded, and the equity conversion environment is basically stable."
Xu Chengyuan also holds the same view. For investors, convertible bonds have the dual attributes of stocks and bonds, and they are very popular, and they can be attacked and retired.
Expanding channels of commercial banks in various ways to "fill blood"
Dong Xizhen, executive director of the Evergrowing Bank Research Institute and a visiting researcher at the Chongyang Financial Research Institute of Renmin University of China, said that with the continuous expansion of banks and the rise in non-performing loan ratios in recent years, the capital consumption of commercial banks is more serious, and some banks are “lightâ€. The bank is transforming its direction and taking the path of “light capital, light assets, and light costs†to reduce the impact of business development on its capital. However, due to the slowdown in the growth of bank net profit in recent years, the bank's endogenous capital replenishment ability is weak. Therefore, exogenous capital replenishment is an inevitable choice for commercial banks.
In fact, due to the urgent need to replenish capital, in addition to convertible bonds, commercial banks continue to “fill blood†through other means.
Since the beginning of this year, a number of listed banks have disclosed their share-oriented issuance plans. The Shanghai Pudong Development Bank plans to issue a $14.8 billion plan for additional issuance. It was approved by the China Securities Regulatory Commission in March this year. In May, the Bank of Beijing’s shareholders’ meeting passed its plan of RMB 24 billion, and the Bank of Ningbo’s shareholders’ meeting passed its 10 billion yuan. The plan for the increase of the plan; the plan for the increase of 31 billion yuan of China Everbright Bank is currently approved by the China Banking Regulatory Commission.
"From last year's trend, preferred stocks and Tier 2 capital instruments are still the main external channels for banks to replenish capital. The choice is to consider factors such as stock prices, interest rates and capital costs," Xiong Qiyue said.
According to Xiong Qiyue, the regulatory compliance pressure of Tier 1 capital adequacy is the most stressful. The issue of preferred stocks is the most “thirst quenchingâ€. Compared with Tier 2 capital instruments, preferred stocks have a higher financing cost, but they have a longer term and can be counted in banks. Equity is beneficial to reduce financial leverage, and can also be included in the leverage ratio of the numerator, its comprehensive benefits are greater than the secondary capital instruments. According to media statistics, 13 listed banks have disclosed or completed the 244 billion preferred stock issuance plan this year.
Xu Chengyuan believes that due to the simple procedures and limited restrictions on the issuance of secondary capital bonds, the cost of raising funds is lower than that of equity, and the capital can be quickly replenished, making the issuance of secondary capital bonds the main means of capital replenishment of commercial banks.
Affected by factors such as market liquidity and regulatory strictness, the scale of bank secondary capital bond issuance has declined this year compared to last year. According to Wind data, as of the end of July this year, the scale of the issuance of secondary capital debt of commercial banks reached 178 billion yuan.
Look at the trend this year, the capital replenishment pressure is still urgent. Zeng Gang, director of the Banking Research Office of the Institute of Finance of the Chinese Academy of Sciences, said that capital is the last line of defense used by banks to withstand risks. To reduce bank financial risks, the bank’s capital adequacy ratio must be maintained. Above a certain level. At the same time, the bank's business development has an important relationship with capital. In other words, the level of bank capital adequacy directly determines the development space and development model of banking business.
At the same time, Chinese banks are more dependent on capital. According to the new capital requirements, the minimum requirements for core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio of systemically important banks are 8.5%, 9.5% and 11.5%, respectively, and the corresponding requirements for non-systemically important banks are respectively 7.5%, 8.5%, and 10.5%, and require commercial banks to meet the standards by the end of 2018.
Xiong Qiyue said that since 2016, the core tier 1 capital of commercial banks has declined, and the growth rate of capital adequacy ratio and tier 1 capital adequacy ratio has narrowed significantly. In 2016, the capital adequacy ratio of commercial banks decreased by 0.17 percentage points compared with 2015. This is the first annual decline in the capital adequacy ratio since official statistics.
"Capital accumulation is difficult to support the speed of asset expansion. According to the current investment efficiency, if the GDP growth rate should be maintained at an average annual rate of 6.5% in the future, the bank's asset size should at least maintain an average annual growth rate of 13%. To achieve a stable level of leverage, The growth rate of capital cannot be lower than 13%. To achieve this goal, it is more difficult in the current business environment. In 2016, the growth rate of asset size and owner's equity of commercial banks was 16.6% and 13.2%, respectively. The former and the latter The difference is 3.4 percentage points. The growth rate of capital is lower than the growth rate of assets, which makes the bank's leverage pressure prominent.†He said that at present, although the growth rate of the real economy has rebounded, the endogenous power of the supplementary capital of the banking system has not been completely repaired. The interest rate spread and asset quality will affect the financing pace of the bank. The overall capital growth rate of the banking industry is still lower than the asset growth rate, and the capital pressure will be enlarged.
Xu Chengyuan also said that under the background of financial de-lost and MPA assessment, some banks with too fast inter-bank business, bank wealth management and investment business will face greater pressure on capital assessment, which is particularly urgent for capital replenishment.
“It is worth noting that in the past few years, some banks have transferred some of the on-balance sheet items off-balance sheet to reduce the size of their risk assets, thereby increasing their capital adequacy ratio in disguise, but in fact their risk nature has not changed. In the context of stricter regulation, rectification of shadow banking and regulatory arbitrage this year, these off-balance sheet items will be returned, and the capital adequacy ratio will fall after the return of the table, which means that it faces a large demand for supplementary capital. It is said that the supplementary pressure on bank capital this year is significantly larger than in previous years.
However, Ma Xiaopeng, chief analyst of China Merchants Securities Financial Industry, believes that from the two dimensions of risk-weighted asset growth rate and return on equity (ROE), except for some small and medium-sized banks that have been fully anticipated, listed banks do not have the nature of plate. Large-area equity refinancing needs.
According to industry insiders, at present, although the growth rate of the real economy has rebounded, the endogenous power of the supplementary capital of the banking system has not been completely repaired. Factors such as interest rate spread and asset quality will have an important impact on the development of banks. Banks' capital replenishment demand is still urgent, especially It is affected by the strictening of supervision. The supplementary pressure of bank capital this year is obviously larger than that of previous years.
The key listed banks will be over 100 billion convertible bonds to be issued on July 29, according to Ping An Bank’s plan to publicly issue no more than RMB 26 billion A-share convertible corporate bonds (hereinafter referred to as “convertible bondsâ€). The convertible bonds issued are worth 100 yuan each and are issued at face value. The duration of the bonds is 6 years from the date of issuance, and the convertible bonds are used to supplement the core tier 1 capital. The issuance plan still needs to be reviewed by the shareholders meeting and approved by the China Banking Regulatory Commission and the China Securities Regulatory Commission. Industry insiders expect that the convertible bond is expected to be completed by the end of this year or early next year.
In March of this year, Everbright Bank's 30 billion A-share convertible bonds were issued. At the same time, the issuance of convertible bonds by a number of banks is in the process. On June 9, Jiangyin Bank was approved by the China Banking Regulatory Commission to issue RMB 2 billion convertible bonds. On June 16, Minsheng Bank's shareholders' meeting passed the plan of issuing 50 billion convertible bonds. On June 21, Changshu Bank was approved by the China Banking Regulatory Commission. On the 5th of July, Wuxi Bank's 3 billion yuan convertible bonds were accepted by the CSRC; on July 11, CITIC Bank was approved by the China Banking Regulatory Commission to issue 40 billion convertible bonds. In December last year, the Jiangsu Bank Shareholders' Meeting also passed a plan to issue a convertible debt of 1.2 billion yuan. According to incomplete statistics, the size of convertible bonds that listed banks will issue in the future will reach 125.2 billion.
The bank's exogenous supplementary capital channels mainly include the issuance of common stock (IPO, fixed increase, allotment), the issue of preferred stock, the issuance of capital bonds, and the issuance of convertible bonds. Since the convertible bond itself cannot replenish capital, it can only replenish capital after it is converted into ordinary shares. Therefore, convertible bonds are not a more common choice for banks when they replenish capital.
Xu Chengyuan, chief analyst of rating agency Oriental Jincheng, said in an interview with the Economic Information Daily that the issuance of convertible bonds is relatively demanding, and that the convertible bonds generally take about one year from the announcement to the completion of the issuance, plus after the issuance. It is not possible to convert shares within six months, and it will take a year and a half to replenish the capital. At the same time, if the stock price of the bank is higher than the agreed conversion price, the investor will choose to convert the stock, so there is uncertainty.
However, it is worth noting that in February this year, the CSRC issued the “Regulations on Guiding and Regulating the Financing Behavior of Listed Companiesâ€. This new regulation has a certain degree of “encouraging†effect on the issuance of convertible bonds. Xu Chengyuan said that this new regulation imposes many restrictions on the application for additional issuance, allotment of shares and non-public offering of shares by listed companies, and the issue of convertible bonds is not yet covered. At the same time, compared with other capital instruments such as fixed-income and share allotment, the issuance of convertible bonds is more convenient and the issuance risk is smaller.
Xiong Qiyue, a researcher at the Bank of China International Finance Institute, said. "The main reason for the issuance of convertible bonds now is that it can supplement the core Tier 1 capital, and the stock price has stabilized and rebounded, and the equity conversion environment is basically stable."
Xu Chengyuan also holds the same view. For investors, convertible bonds have the dual attributes of stocks and bonds, and they are very popular, and they can be attacked and retired.
Expanding channels of commercial banks in various ways to "fill blood"
Dong Xizhen, executive director of the Evergrowing Bank Research Institute and a visiting researcher at the Chongyang Financial Research Institute of Renmin University of China, said that with the continuous expansion of banks and the rise in non-performing loan ratios in recent years, the capital consumption of commercial banks is more serious, and some banks are “lightâ€. The bank is transforming its direction and taking the path of “light capital, light assets, and light costs†to reduce the impact of business development on its capital. However, due to the slowdown in the growth of bank net profit in recent years, the bank's endogenous capital replenishment ability is weak. Therefore, exogenous capital replenishment is an inevitable choice for commercial banks.
In fact, due to the urgent need to replenish capital, in addition to convertible bonds, commercial banks continue to “fill blood†through other means.
Since the beginning of this year, a number of listed banks have disclosed their share-oriented issuance plans. The Shanghai Pudong Development Bank plans to issue a $14.8 billion plan for additional issuance. It was approved by the China Securities Regulatory Commission in March this year. In May, the Bank of Beijing’s shareholders’ meeting passed its plan of RMB 24 billion, and the Bank of Ningbo’s shareholders’ meeting passed its 10 billion yuan. The plan for the increase of the plan; the plan for the increase of 31 billion yuan of China Everbright Bank is currently approved by the China Banking Regulatory Commission.
"From last year's trend, preferred stocks and Tier 2 capital instruments are still the main external channels for banks to replenish capital. The choice is to consider factors such as stock prices, interest rates and capital costs," Xiong Qiyue said.
According to Xiong Qiyue, the regulatory compliance pressure of Tier 1 capital adequacy is the most stressful. The issue of preferred stocks is the most “thirst quenchingâ€. Compared with Tier 2 capital instruments, preferred stocks have a higher financing cost, but they have a longer term and can be counted in banks. Equity is beneficial to reduce financial leverage, and can also be included in the leverage ratio of the numerator, its comprehensive benefits are greater than the secondary capital instruments. According to media statistics, 13 listed banks have disclosed or completed the 244 billion preferred stock issuance plan this year.
Xu Chengyuan believes that due to the simple procedures and limited restrictions on the issuance of secondary capital bonds, the cost of raising funds is lower than that of equity, and the capital can be quickly replenished, making the issuance of secondary capital bonds the main means of capital replenishment of commercial banks.
Affected by factors such as market liquidity and regulatory strictness, the scale of bank secondary capital bond issuance has declined this year compared to last year. According to Wind data, as of the end of July this year, the scale of the issuance of secondary capital debt of commercial banks reached 178 billion yuan.
Look at the trend this year, the capital replenishment pressure is still urgent. Zeng Gang, director of the Banking Research Office of the Institute of Finance of the Chinese Academy of Sciences, said that capital is the last line of defense used by banks to withstand risks. To reduce bank financial risks, the bank’s capital adequacy ratio must be maintained. Above a certain level. At the same time, the bank's business development has an important relationship with capital. In other words, the level of bank capital adequacy directly determines the development space and development model of banking business.
At the same time, Chinese banks are more dependent on capital. According to the new capital requirements, the minimum requirements for core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio of systemically important banks are 8.5%, 9.5% and 11.5%, respectively, and the corresponding requirements for non-systemically important banks are respectively 7.5%, 8.5%, and 10.5%, and require commercial banks to meet the standards by the end of 2018.
Xiong Qiyue said that since 2016, the core tier 1 capital of commercial banks has declined, and the growth rate of capital adequacy ratio and tier 1 capital adequacy ratio has narrowed significantly. In 2016, the capital adequacy ratio of commercial banks decreased by 0.17 percentage points compared with 2015. This is the first annual decline in the capital adequacy ratio since official statistics.
"Capital accumulation is difficult to support the speed of asset expansion. According to the current investment efficiency, if the GDP growth rate should be maintained at an average annual rate of 6.5% in the future, the bank's asset size should at least maintain an average annual growth rate of 13%. To achieve a stable level of leverage, The growth rate of capital cannot be lower than 13%. To achieve this goal, it is more difficult in the current business environment. In 2016, the growth rate of asset size and owner's equity of commercial banks was 16.6% and 13.2%, respectively. The former and the latter The difference is 3.4 percentage points. The growth rate of capital is lower than the growth rate of assets, which makes the bank's leverage pressure prominent.†He said that at present, although the growth rate of the real economy has rebounded, the endogenous power of the supplementary capital of the banking system has not been completely repaired. The interest rate spread and asset quality will affect the financing pace of the bank. The overall capital growth rate of the banking industry is still lower than the asset growth rate, and the capital pressure will be enlarged.
Xu Chengyuan also said that under the background of financial de-lost and MPA assessment, some banks with too fast inter-bank business, bank wealth management and investment business will face greater pressure on capital assessment, which is particularly urgent for capital replenishment.
“It is worth noting that in the past few years, some banks have transferred some of the on-balance sheet items off-balance sheet to reduce the size of their risk assets, thereby increasing their capital adequacy ratio in disguise, but in fact their risk nature has not changed. In the context of stricter regulation, rectification of shadow banking and regulatory arbitrage this year, these off-balance sheet items will be returned, and the capital adequacy ratio will fall after the return of the table, which means that it faces a large demand for supplementary capital. It is said that the supplementary pressure on bank capital this year is significantly larger than in previous years.
However, Ma Xiaopeng, chief analyst of China Merchants Securities Financial Industry, believes that from the two dimensions of risk-weighted asset growth rate and return on equity (ROE), except for some small and medium-sized banks that have been fully anticipated, listed banks do not have the nature of plate. Large-area equity refinancing needs.
Electric Screw Driver,Cordless Screwdriver Set,Computer Repair Kit,Screwdriver Kit Set
SUZHOU CREATION SPACE INTELLIGENT TECHNOLOGY CO.,LTD , https://www.pkanglegrinder.com