The Urban Commercial Bank IPO Financing Motivations And The Efficiency Research

One of the hot spots for present capital market is the urban commercial bank(UCB)which known as the popularity of its listing and expansion.However,due to the current market financial risk increases,UCBs are exposed to non-performing assets and facing with great operational risks.China Banking Regulatory Commission(CBRC)has also introduced a capital adequacy ratio management system to conduct a comprehensive risk regulation of the banking sector,so it can deal with banks over-investment risk assets and reduce the exposure of risks.The reason UCBs are getting popular is because the development is limited by the capital and the holdings of risky assets.For enhancing the ricks resist ability,UCB has to seek equity financing to expand the capital and to improve the operating efficiency,also through the listing to obtain more efficiency way of financing on capital markets.Nowadays,some of the UCBs have been successfully listed,but there are many UCBs are still looking for opportunities to get listed.The question is whether listing the local commercial banks can improve the efficiency of the bank,there is no clear unified conclusion at home and abroad.Therefore,the study of listed UCB's efficiency will not only provide an insight view of UCBs listing ricks,but also give us significance in theory and practice.Listed Nanjing Bank was chosen to investigate the reason and motivation of its listing.CBRC risk supervision index system,Du Pont analysis system and EVA evaluation system were applied to horizontal analyze the efficiency of Nanjing Bank before and after listing.By vertical analysis comparison with Jiangsu bank which has not been listed before 2016 with similar business scope and strategies as Nanjing Bank,to test the bank efficiency.Finally to evaluation the listing impacts on Nanjing Bank's risk level,profitability and comprehensive management performance.This paper also used data envelopment analysis(DEA)to measure the efficiency level of 14 listed commercial banks and 3 unlisted cities commercial bank from 2005 to 2015 in China to find out the main influencing factors of the efficiency level of Nanjing Bank before and after listing.The results suggested listing has positive effects on Nanjing Bank's risk indicators,it effectively improves the risks resist ability and increases the diversification of banking business innovation and income source,increase the total assets of bank's yield level.Listing also optimized the bank internal management system and greatly improved the pure technical efficiency.On the other hand,from the shareholder's point of view due to listing,Nanjing Bank showed rapid capital increase within short time and dramatically decrease on equity multiplier,which has caused damage on the bank's ROE and scale efficiency in a period of time.In conclusion,this paper provides few decision-making suggestions to the unlisted UCBs: Firstly,be careful to select the listing,it is necessary to consider the bank's capital demanding.Secondly,long-term development strategy will greatly help the bank's development,such as promote inter-industry mergers and acquisitions,banking intermediary business.Last but not least,optimizing bank themselves' own internal management structure to improve management efficiency.