The Cost-Benefit Analysis Of Ningbo Bank Preferred Stock Issue

On November 30,2013,the state council issued?The guidance on the pilot preference of preferred stock?,which clearly defined the legal status of preferred stock in China.In 2014,the China securities regulatory commission and the China banking regulatory commission issued a series of regulatory documents,and the preferred stock pilot was officially launched.As a special form of securities,preferred stock has the characteristics both of stock and bond,which is an effective supplement to the traditional financing tools.At present,the enterprises that issue preferred stock in China are mainly concentrated in the banking industry,and several listed commercial Banks,including Bank of China,China Construction Bank and Shanghai Pudong Development Bank,have completed the issuance of preferred shares.The positive significance of preferred stock in reducing the financing pressure of common equity and improving the capital adequacy ratio of Banks has been widely recognized.In this paper,the research object is the preferred stock issue case of Ningbo Bank.In order to provide references to the theoretical research and practice of preferred stock issue,we explore the motivation,cost and benefit of the preferred stock issue,based on the analysis of the existing research theories,combined with our country related system background.This paper mainly includes both theoretical research and case analysis.Theoretical research mainly includes preferred stock theory and commercial bank capital supervision theory.In case analysis,the first part is the introduction of the preferred stock issue case and the analysis of the distribution motivation.The second part analyzes the issuing cost of preferred stock from the perspective of common shareholders and company.The third part analyzes the effect of preference stocks issue on the three main business sectors of bank,including assets,liabilities and intermediate business sectors.In the fourth part,the financial benefit of the preferred stock issue is analyzed by means of bank competitive system index,principal component analysis and event method.The fifth part is conclusion and suggestion.Through the above research,this paper holds that the preferred stock issue of Ningbo Bank basically met the issuing motivation.The preferred stock issue added Ningbo bank's core capital,which satisfied the requirements of commercial bank capital regulation,and made it's own development more healthy,due to the optimization of capital structure.At the same time,the overall competitiveness of Ningbo Bank has improved after the success of the preferred stock issue,and investors and the market have responded positively.Based on the results of the above research,this article gives three suggestions for the enterprises,which have demands to issue preferred stocks,including carefully issue preferred stocks,keep balance between the shareholders of preferred stocks and common stocks and reasonably set the preferred stock proportion.