Study On The Impact Of Reduction By Foreign Strategic Investors On The Performance Of Joint-stock Bank

Since China joined the WTO at the end of 2001,the domestic banking industry has been infiltrated by many foreign funds in the form of stock acquisition.After that,the central government conducted joint-stock reforms separately on four state-owned sole proprietorships--Bank of China,China Construction Bank,Industrial and Commercial Bank of China,and Agricultural Bank of China.What's more,the former three band introduced overseas strategic investors and they restructured themselves into state-controlled joint-stock commercial banks.In August 2007,the subprime mortgage crisis broke out,and it swept through the US,Japan,Europe and many other world's most important financial market at that time.Banking industry is the first to be affected by the crisis.As a result,many American and European Banks,including UBS and Bank of America,which hold a large number of China's state-owned large bank shares,faced financial problems such as financial losses or even bankruptcy.In addition,with the arrival of the three-year holding period at the end of 2008,the shares of China's state-owned enterprises have been greatly lifted by overseas strategic investors.Began in 2012,stock-reduced objects of foreign banks have changed from state-owned large banks to national joint-stock banks,including Shanghai Pudong Development Bank,China Citic Bank,China Industrial Bank and Huaxia Bank,which all reduced or cleared positions by foreign shareholders.In February 2016,CitiBank formally announced a deal with China Life Insurance Company.According to the agreement,CitiBank sold its 20%stake of China Guangfa Bank to China Life Insurance Company and withdraw investment in China Guangfa Bank.As of December 31,2017,among the top 10 shareholders of 12 joint stock bands,only Bohai Bank and Evergrowing Bank still hold foreign funds(Standard Chartered Bank holds 19.99%shares of the former bank,and United Overseas Bank holds 13.18%shares of the latter).Many researches chose domestic banks when they introduce strategic investors overseas,as the perspective of research to study the impact on bank performance,corporate governance and risk management of banks.However,few literatures comprehensively and systematically analyzed the impact on companies when foreign strategic investors reduce funds.This paper uses the GMM method based on the financial data of 5 stocks from 2010 to 2017 to empirically analyze the impact of divestment on bank performance.Then,the author chooses Huaxia Bank,who was closed position by Deutsche Bank,an overseas strategic investor,on December 28,2015 as the core case to analyze the influence of reduction of overseas strategic investors' position on the value of companies,from the perspective of financial reports and capital market,and use this to support the conclusions of empirical research.The result of research shows that,the divestment of overseas strategic investors had almost no effect on the performance of China's joint-stock banks,expect that ithad a significant impact on the net interest margin in profitability(the effect performs in the form of a U-shape),This paper believes that the may reason of this phenomenon is that,both two parties have carried out a long-term strategic cooperation before the stock reduction of the overseas strategic investors.What's more,joint-stock banks have set up a more comprehensive cooperation mechanism with its flexible management,and have learned advanced management mode,practical technology and service experience of foreign investors,and finally integrated it into his own development.At the end of paper,the author puts forward corresponding suggestions from the standpoint of banks,regulators and investors respectively.