The Causes Of SPD Bank's Targeted Issuance And Financial Performance Analysis

In November 2010,the issue of Basel 3 provided guidance for the global banking industry on new regulatory requirements,which requiring the banking industry to increase buffer capital to improve the size and the quality of capital.According to the guidelines of the agreement,The industry's Tier 1 core capital ratio will fall by 1%.In June 2012,the China Banking Regulatory Commission issued the Capital Management Measures for Commercial Banks based on the Basel 3,which came into effect in January 2013 and the banks should meet the regulatory requirements at the end of 2018.The management measures require that the capital adequacy ratios of systemically important banks and non-systemically important banks be 11.5% and 10.5%,respectively,thereby triggering a refinancing boom for domestic commercial banks.The external capital replenishment of A-share listed banks can be met through the issuance of convertible bonds,private placements,preference shares,and issuance of secondary capital bonds.Since the implementation of the measures,7 out of 12 A-share listed banks have chosen Replenishing capital in the form of private placements,it can be seen that private placements have become the main form of financing for A-share listed joint-stock banks.The private placement has the characteristics of low issuance threshold and flexible issuance conditions,which meets the requirements of the banking industry for efficient and rapid capital replenishment.The supervision effect,information asymmetry theory,and agency cost theory reflected in the private placements indicate that the private placements can achieve positive market response,but at the same time,the private placements also conceal a series of benefits transmission actions such as inferior assets being injected into the enterprises by large shareholders,infringing on small and medium shareholders.The interests affect the long-term development of the company,so we need to pay particular attention to the motivation of the bank's private placement and future financial performance in order to evaluate the bank's private placement.This article takes Shanghai Pudong Development Bank Co.Ltd.as a case study,which accomplished to supplement first-tier core capital through targeted issuance in 2017.Through research on relevant literature and screening of official or unofficial information,it is explored that Pudong Development Bank chose to use targeted issuance as a supplement.The motives of the first-level core capital,meanwhile,analyze the financial performance of SPDB's targeted additional issuance event from a horizontal and vertical perspective by comparing the market response before and after the targeted issuance,basic financial data,and performance evaluation indicators,combined with relevant data of other A-share listed banks.Impact.After analyzing and researching this article,the following conclusions are reached: supplementing capital through refinancing is an effective guarantee for SPDB to implement its development strategy and enhance the future competitiveness of the bank;SPDB's choice of additional issuance for refinancing is to meet regulatory requirements and maintain shareholder structure An ideal way to reduce the cost of issuance;SPDB's financial situation since 2014 is not very satisfactory,and the private placement has not brought significant improvement in financial status.