pros and cons of listing state-owned banks

The listing of the four major state-owned commercial banks is not objective. From the analysis of pros and cons, it is the right way to promote the advantages and eliminate the disadvantages.

Benefits

(1) Enriching capital by listing direct financing: The capital adequacy ratio is an important indicator to measure the bank's capital status. According to the requirements of the Basel Accord, the capital adequacy ratio of commercial banks shall not be less than 8%, which is also stipulated in the Mainland Banking Law. The capital adequacy ratio represents the ability of commercial banks to cope with financial risks. The higher the ratio, the more secure the depositor's principal. At present, the capital adequacy ratio of state-owned commercial banks in mainland China is generally not up to standard. For example, by the end of September 1999, ICBC was 4.57%, ABC was 1.44%, CCB was 3.79%, and only BOC reached 8.5%.

(2) It is conducive to social supervision and transparency: after becoming a listed company, information, business performance and major practices of the company will be published regularly according to law, which can achieve certain transparency, and the supervision of shareholders, regulatory authorities and the public will increase day by day, which is conducive to the company's control and business transformation. Relatively speaking, investment decision-making mistakes and the formulation of major measures of the company are subject to certain constraints, which can avoid black-box operations.

(3) It is conducive to dispersing the operational risks of banks: the issuance and listing of shares means the socialization of the sharing of operational risks of banks, which is embodied in the principle that joint-stock banks enjoy the benefits and bear the risks. The more shares of a bank are dispersed, the more shareholders there are, and the more significant its risk diversification function is. In this way, the risks shouldered by the country can be gradually put down. At the same time, the habit of commercial banks relying on government financial subsidies in the past can be improved day by day. To be responsible to shareholders, not to the higher government. Relatively speaking, the operating efficiency of banks has naturally increased.

(4) resources can be properly used: the so-called resources are not only the funds obtained, but also the personnel and equipment. In the past, it was taken for granted that state-owned enterprises ran the society. It is a heavy burden to put the resources of enterprises into social welfare undertakings. After listing, social welfare undertakings should be divested and handed over to governments at all levels for budgeting, and enterprises only need to pay part of the social security benefits of employees according to law. With the proper use of enterprise resources, the personnel and equipment allocated to social undertakings in the past can be recovered, retrained and resettled.

(5) Can expand and balance the stock market: On July 19th this year, when the Shanghai stock index rose to 2, points and the number of listed companies in Shanghai and Shenzhen exceeded 1,, there were only five financial companies, which was unbalanced in the whole proportion.

Disadvantages

(1) The company can be transformed if it is mistakenly thought that it is listed: after listing, there is pressure from outside supervision, but if the company itself lacks self-discipline after listing, non-performing assets will still be produced, which will become a stock that shareholders and investors are afraid to avoid. Don't mistake listing as a panacea to solve the dilemma of state-owned commercial banks and meet the WTO entry. If the listing audit and the attitude of the person in charge of the company are not adjusted, it is easy to fall into the "circle money" drawback of eating up the finances and eating investors, that is, issuing stocks for banknotes.

(2) Shareholders bear the cost of reform: On the one hand, the listing of state-owned commercial banks has opened up channels for investors to invest, on the other hand, whether shareholders have also borne a share of the cost of reform. Under the large proportion of state-owned shares and legal person shares, it is worth considering whether the right to speak at the shareholders' meeting is valued or not, and whether listing as a way of reform is fair to shareholders should be carefully considered and explained in detail to shareholders. More importantly, through listing, the management system will be completely changed, so that the stock price will be recognized by the public, which is beneficial to the country, enterprises and shareholders.

(3) Pay attention to the transfer of bank risks to financial risks: the burden of domestic national debt is heavy. By the end of 1999, the total national debt reached 1,989.5 billion yuan (RMB, the same below), accounting for nearly 25% of GDP, more than five times higher than five years ago. The dependence of central finance on national debt is much higher than the average level of western countries, the debt burden of central finance has increased, and the room for expanding the issuance of national debt has become smaller and smaller. China's budget debt burden rate was 9.6% in 1998 and 11.7% in 1999. However, in order to prevent the financial turmoil, in 1998, the Ministry of Finance issued 27 billion yuan of special treasury bonds to state-owned commercial banks, specifically to supplement the capital of state-owned commercial banks. In order to develop funds in the central and western regions and establish a social security system, huge funds are needed, such as re-issuing government bonds, which is a heavy financial burden. Although the government does not have to bear the financial burden after the listing of state-owned commercial banks, if the stock market is depressed, the stock price falls, financing is insufficient, and government bonds are not re-issued to supplement the capital of state-owned banks, the banking crisis and financial crisis will affect each other.

from the above, the advantages outweigh the disadvantages, but it is not difficult to improve and prevent the disadvantages. There are only conceptual problems, such as the reform of shares before listing and avoiding eating the same pot of rice after listing. Some of them are the establishment of laws, regulations and systems, bank risk management and the establishment of systems according to law, and another example is the regular disclosure of information after listing, which is fair to shareholders and can prevent risks.

four suggestions

(1) The four major state-owned commercial banks that the lead underwriter is responsible for are responsible for advising the listing, and they must be sure to take responsibility: the new stock issuance system will be changed from approval to approval, and the lead underwriter will be responsible for his own goodwill credit score. Once the four major commercial banks are consulted and evaluated for listing, they should take a responsible attitude towards the country, society and investors, and it is bound to have outstanding credit when they sponsor the listing with one signature.

(2) Accountants who play the role of economic police should take the responsibility: ordinary investors rarely understand the numerous company accounting accounts, and the accountants appointed by the lead underwriter should take the responsibility to check them carefully. They should not be lenient because they are state-owned commercial banks, or even disguise their accounts and go public for listing. This is different from the past incidents of Hongguang and Qiongminyuan.

(3) replacing heteronomy with self-discipline: the supervision of the public and shareholders mentioned above is, after all, heteronomy and passive. And if you are conscious and self-disciplined, you can win the trust of the public. Inter-bank self-discipline association is a transitional practice. Once China joins the WTO, self-discipline is insufficient, and other laws cannot be effective. Under the market-oriented elimination of the superior and the inferior, state-owned commercial banks will also close down.

(4) adopting the research report put forward by the audit and supervision department of the People's Bank of China in August 1997, and integrating the practices of the International Monetary Fund, this credit management table should be designed for the classified management of bad debts, aiming at changing the state-owned commercial banks. The basic concept of management should not be the wrong concept that you can sit back and relax after you have absorbed enough capital for listing. In particular, the strengthening of the concept of risk can not be ignored. In the past, the state monopolized risks, and more bad debts had little to do with the reputation and risks of banks. After all, there was a national credit guarantee. Once the country gradually withdrew from the market, banks had to face credit and risks step by step, that is, "corporate credit" was increasingly greater than "national credit", and finally "corporate credit" was the mainstay. Therefore, if we lack risk management, we may fall into the financial crisis.

Future trend

(1) Based on the challenges of globalization and China's entry into WTO, it is foreseeable that state-owned commercial banks will go public and reorganize their assets through the stock market. Due to the advent of bank informatization, the design of e-banking and networking is inevitable, and this design requires huge manpower, material resources and financial resources. In order to reduce the competition cost, bank merger or strategic alliance is bound to be faced. However, if we merge for the sake of merger and adopt "weak and weak combination", it would be better not to combine. Or the corporate cultures of each other are incompatible and rigidly merged, which will inevitably lead to separation, or it will take time to run in.

(2) The separation of government and enterprise is an inevitable trend in the future: general state-owned enterprises have made this requirement for a long time, not to mention the four major commercial banks belonging to state-owned enterprises. The so-called separation of government and enterprise means the separation of ownership (board of directors) and management rights (professional managers), so as to achieve self-management, self-financing, self-restraint and self-development. Now that it has been listed on the market, the equity has also been dispersed, and the requirement of separating government from enterprises will be increasing. At the initial stage of listing, the state-owned shares and legal person shares held by the state holding company can be as high as 7-8% because they are not circulated, which is unfair to the general shareholders, and it is also easy for people to lock in chips and speculate from them. Therefore, how to further release the state-owned and legal person shares in the future should be considered.

(3) The shares of listed state-owned commercial banks are scattered, and what the government wants to manage is turned to macro management; Through monetary policy, interest rate, deposit reserve ratio, etc., it is controlled by the central bank. It is not like in the past, when administrative intervention is used to force an enterprise to allocate funds to save that company. The central bank is in charge of macro-operation, trading order and crisis prevention. At that time, listed commercial banks, enterprises and individuals can make their own choices through the market mechanism. Especially after the interest rate floats freely, the self-discipline agreement between banks will be broken.

Conclusion

The sequential reform of the four major state-owned commercial banks meets the requirements, and the listing of shares is the way to go, because the accession to the WTO is imminent and the competition is fierce. Since the debt-to-equity swap has achieved results and reduced the debts of the four major state-owned commercial banks, it can meet the listing conditions, and listing is the best choice. From the objective discussion of the policy background, it is necessary for the four state-owned commercial banks to go public. In the analysis of advantages and disadvantages, although the advantages and disadvantages are mutually seen, the advantages outweigh the disadvantages in the present situation and the future, which is conducive to the establishment of a socialist market economy. The wholly state-owned banks left over from the planned economy era will be reformed into modern companies and listed on the stock market, which will not only reduce the financial burden of the government, but also open up diversified investment channels for investors and avoid financial crisis and waiting under orderly operation. If you don't do it today, you may regret it tomorrow. What's more, at present, the development of the central and western regions and the social security need a lot of money, so the government can't be distracted to take care of the state-owned banks, but handle it properly and go public smoothly. If the stock market is booming and the listed state-owned commercial banks are competitive, the state-owned shares and legal person shares will be released at the opportunity, which will bring great help to the financing of the western development funds and social security.