Banks are accelerating IPO, asset quality will become a hurdle

Original title: Banks accelerate IPO, asset quality will become obstacles

Near the end of the year, another familyBankWelcome to the good news of the IPO, the China Securities Regulatory Commission issued aChongqing BankApproval of an initial public offering, which meansChongqing BankWill officially join the A share listingBankteam. Since 2020,BankThe IPO review is progressing slowly. So far, there are 15 banks in the AA share queue in the eyes of analysts, the new roundSmall and medium banksFunding may have been slackened. Bank IPOs are expected to accelerate slightly next year, but there will be no spikes in the future, just cadence issuance. At the same time, we must pay attention to the severe challenges posed by downward pressure on asset quality.

The first commercial bank of the city of A + H in the west

The western region is about to welcome the city’s first commercial bank A + H. On December 18, the China Securities Regulatory Commission issuedChongqing BankThe A-share IPO approval document indicates that Chongqing Bank will formally join the A-share listed banking echelon, and will also become the first commercial city bank in the western region to achieve A + H.

Established in 1996, the Bank of Chongqing is the first state-owned local equity system established on the western and upper reaches of the Yangtze River.dealBank, in unregistered A sharesmarketPreviously, Bank of Chongqing had been successfully listed on the Hong Kong Stock Exchange on November 6, 2013.

The main purpose of the Chongqing Bank listing is to “buy blood.” According to the above prospectus, the Bank of Chongqing plans to issue no more than 781 million shares, which represents 19.98% of the total number of shares after issuance. The funds raised deduct the issuance costs. Subsequently, all will be used to enrich the bank’s Tier 1 core capital and increase its capital adequacy ratio.

On the same day it obtained approval for the issue, the Bank of Chongqing issued a supplement on the Hong Kong Stock Exchange.adHe said that the number of wholesale bank shares of the bank’s A shares did not exceed about 347 million shares, and the size of this issue was reduced compared to the draft prospectus.After obtaining approval, Chongqing Bank can initiate the IPOjobsThe market predicts that if all goes well, Bank of Chongqing will list in January 2021 and is expected to become the city’s first commercial bank to list A shares next year.

Tao Jinzai, Deputy Director of the Center for Macroeconomic Research at the Suning Institute of Financeto acceptThe Beijing Business Daily reporter analyzed that the Chongqing Bank listing, on the one hand, complemented the bank’s capital; on the other hand, prior to listing, the bank completed the classification of non-performing assets in a short period of time and reinforced the identification of non-performing assets to some extent. It improved asset quality and provided a paradigm for subsequent bank quotes.

15 banks “waiting”

In the streamMarket environmentMost small and medium-sized banks face the dilemma of insufficient capital.ZenjiAn important way to administer the system.

Looking back in history, the bank’s listing was opened in 2016, includingSunong Bank、Bank of shanghai、Guiyang Bank、Jiangsu Bank8 banks, including those listed successfully; the bank’s IPO slipped into a recession in 2017, with onlyZhangjiagang Branch1 bank listed. In 2018, the number of bank listings began to increase.ShareChangsha Bank、Zhengzhou BankwithBank of ChengduThree banks managed to list. In 2019, the rate of listing of banks has accelerated significantly, ushering in a “small climax”, with up to 8 banks successfully listed in A shares.

Despite the incessant enthusiasm from the banks, the bank’s IPO review process this year has slowed down significantly.Bank of XiamenOne company successfully obtained A shares, and Chongqing Bank, Shanghai Rural Commercial Bank and Qilu Bank successively “approved the meeting.” At present, Shanghai Rural Commercial Bank and Qilu Bank have not obtained IPO approval.

According to the first issue released on the official website of the China Securities Regulatory CommissioncompanyThe information list, as of December 17, there are 15 banks waiting in line for review, Xiamen Rural Commercial Bank and Huzhou Bank will be listed on the Shanghai Stock Exchange.Main board listing, Guangzhou Bank and others chose to list on the SME Board of the Shenzhen Stock Exchange. In the queue sequence, except for Bank of Huzhou and Bank of Guangzhou, the remaining 13 banks have entered the “pre-disclosure update” status.

Speaking about the reasons for the slowdown in the pace of bank IPOs, Pan Helin, executive dean and professor at the Institute of Digital Economy at Zhongnan University of Economics and Law, believes that the slowdown in IPOs is due to many reasons. One is that a large number of banks have already gone public; the other is the financial sector. The industry is an industry optimized for resource allocation, and at this stage the capital market gives priority toReal economy, WhichmanufacturingAnd the difficulty of financing the technology industry. Therefore, reducing the priority of banks has become a logical phenomenon.

“The new round of small and medium bank financing may have relaxed. Bank IPOs will accelerate slightly next year, because the main board filing system will further lower the threshold for bank equity IPOs, but due to institutions financialMain forceBasically i haveOpen marketFinancing channels, so it is expected that there will be no peaks in the future, but rhythmic issuance. “Explained Pan Helin.

The asset quality challenge

Under the impact of the epidemic, the need for small and medium-sized banks to supplement their core capital has become more urgent. A reporter for the Beijing Business Daily noted that small and medium-sized banks, including Hankou Bank, Dongguan Rural Commercial Bank and Xinjiang Huihe Bank, are also gradually moving forward in the listing process.

Although the listing is an important way for banks to replenish capital, it should still be noted that theprofitThere is little room to reserve additional capital, or you will face more challenges in the IPO process.

“The current pattern of listed banks has been relatively stable, and the number of listed banks has increased, and the difficulty of subsequent listed banks may increase. In addition, many banks have low valuations after going public.P / B ratioGenerally less than 1, the overview is correctinvestmentThis is not favorable and supervision is becoming more cautious on the listing of banks. “As Tao Jin said, the biggest challenge remains the quality of bank assets. If the bank’s non-performing loan ratio is high,ProvisionIf the rate is not high and the risk control is insufficient, the price will be affected, therefore, banks planning to go public must first maintain prudent operations and use various methods to resolve doubtful assets and improve the quality of assets.

From the perspective of the industry as a whole, the overall default rate of the banking industry is also increasing. Data from the China Banking and Insurance Regulatory Commission shows that by the end of the third quarter of 2019,Commercial bankThe balance of non-performing loans was 2.37 trillion yuan, an increase of 132 billion yuan from the end of the previous quarter; the non-performing loan rate for commercial banks was 1.86%, an increase of 0.05 percentage points from the end of the previous quarter.

Pan Helin also has the same opinion. He further noted that the biggest challenge for bank IPOs is related to the default rate. Local banks have different business addresses from large state banks and commercial banks in large cities. The development of various regions is uneven and the specific problems of local banks are Loan rates are also different. Small and medium banks generally have higher risk exposures than large banks. Relying on the local economy, local banks should strengthen risk control measures and efforts to stabilize asset quality.

(Source: Beijing Commercial Daily)

(Responsible editor: DF522)