Research On The Financing Of Preferred Stock Of PF Bank

On November 30,2013, the state council enacted the guidance of developing the pilot preferred stock, which marked government's another new attempt of preferred stock financing in capital market of our country. After promoting pilot preferred stock financing, banking index rose 1.66 percent, showing the market reacted positively to the introduction of preferred stock financing. On December 9,2013, China Securities Regulatory Commission approved regulations of pilot preferred stock, it provides a formal standard and framework of preferred stock financing for the detailed operation measures. The statistics by CBRC in December 2013 shows:Commercial bank's core Tier one capital adequacy ratio and capital adequacy ratio were 9.95% and 12.19%, which had fallen by about one percent, comparing to the 10.62% and 13.25% in 2012. To fulfill the request of regulation, the commercial bank system will appear a more centralized capital need in 2016. Pilot preferred stock had provided new capital raising channels for listed bank. Because preferred stock have both characteristic of stock rights and creditor rights, it manifest as stockholders' equity and a relatively constant dividend, it also can be counted as bank's "other tier one capital". On the condition of relatively low value of assessment and limited common stock equity financing, bank preferred stock has higher yields and certainty, which will be beneficial to bank's tier one capital complement, and at the same time reduce the pressure of common stock equity financing and promote the valuation of secondary market. This article is on the basis of PF bank's published issue scheme of limited stock, striving to begin with existing scheme, starting with detailed project and clause, using the pattern of situation analysis, calculating the changes before and after preferred stock issued in aspect of company's financial figures, capital management, capital composition, corporate governance and so on. This paper stands the perspective of issuer, analyzing the preferred stock issue which brings advantages and disadvantages, and proposes countermeasures and suggestions in accordance with result, trying to bring sufficient consultation and benefit of preferred stock financing plan for other company.