As the first city commercial bank with trillions of assets, the core capital adequacy rate of Nanjing Bank is relatively low. The latest half-year performance report shows that its core capital adequacy rate is 8.87%.
At this years performance briefing, Hu Shengrong, chairman of the bank, said frankly: Although the capital adequacy level of our bank (Nanjing Bank) has not declined but has risen, it is still relatively low. This is one of our problems. We must resolve to solve the problem of capital replenishment. Otherwise, it will be detrimental to the present and future development of the whole country.
However, over the past two years, fixed growth has been fruitless, how to solve the heart disease of capital will still test the Bank of Nanjing.
Incremental twists and turns
The fixed increase plan of Nanjing Bank dates back to two years ago. On July 31, 2017, the board of directors of Nanjing Bank approved the plan for the first time. There are five issuing objects, namely Nanjing Zijin Investment Group Co., Ltd. (hereinafter referred to as Zijin Investment), Nanjing High Tech Co., Ltd. (hereinafter referred to as Nanjing High Tech), Taiping Life Insurance Co., Ltd. (hereinafter referred to as Taiping Life), Jiangsu Phoenix Publishing Media Group Co., Ltd. (hereinafter referred to as Phoenix Group). u201d) He Jiangsu Traffic Holding Co., Ltd. (hereinafter referred to as Traffic Holding) plans to subscribe no more than 1.695 billion shares and raise no more than 14 billion yuan in total.
The plan was subsequently considered by the shareholdersmeeting and approved by the former Jiangsu Banking Regulatory Bureau, but rejected by the SFC.
On July 30, 2018, the Bank of Nanjing announced that the application for non-public issuance of shares had not been approved by the issuance Review Committee of the Securities Regulatory Commission. On September 28 of the same year, the Bank of Nanjing received the Decision of the CSRC not to approve the application for non-public issuance of shares of Nanjing Bank Co., Ltd. According to the regulations, it may submit the application documents to the CSRC again six months after the date of making the decision.
Then until May 21, 2019, the Bank of Nanjing announced the plan of non-public issuance of shares again. The issuing target was changed from five to four, namely, BNP Paribas, Zijin Investment, Traffic Holdings and Jiangsu Province Company, China Tobacco Corporation (hereinafter referred to as Jiangsu Tobacco Company). It can be found that the original plan to participate in the subscription of Pacific Life, Phoenix Group, Nanjing Hi-Tech have withdrawn, BNP Paribas, Jiangsu Tobacco Company is a new face. The number of issues and the amount of money raised remain the same as the previous scheme.
About two months later, the banks growth plan changed again. The Nanjing Banks Preliminary Plan for Private Issuance of Stocks (Revised Draft), published on August 1, has further revised the fixed increase plan adopted in May. The most significant change is Zijins abandonment of investment, thus reducing the target of issuance to three companies, namely BNP Paribas, Traffic Holdings and Jiangsu Tobacco Company, which intend to subscribe no more than 131 million shares, 999 million shares and 394 million shares respectively; the number of issuance will be adjusted from no more than 1.696 billion shares to no more than 1.525 billion shares; the total amount of fund raised will be no more than 140.4 billion shares. The adjustment was not more than 11.619 billion yuan.
If the increase can be implemented as planned, the proportion of BNP Paribas (including QFII) will be 14.04%, the proportion of traffic holding will be 9.99%, and that of Jiangsu Tobacco Company will be 3.93%.
Regarding the reasons for Zijins withdrawal from the fixed increase plan, the Bank of Nanjing responded to the reporter from the Economic Observatory that Zijins investment has not been approved by the regulatory authorities because the individual financial indicators have not met the requirements, and will no longer participate in the banks private share issuance plan.
An analyst of the banking industry of a securities firm believes that Zijin investment may have nearly 50% of its net assets after subscribing 300 million shares of Nanjing Securities, so it chose to withdraw from the fixed increase of Nanjing Bank.
It is worth mentioning that shortly after the announcement of the revised fixed increase scheme, Nanjing Hi-Tech, which had withdrawn from the directional additional offering of Nanjing Bank, turned to the secondary market and increased its stake in Nanjing Bank through centralized bidding. According to the announcement, Nanjing Gaoke, the major shareholder of Nanjing Bank, increased its holdings of 15.2074 million shares through the Shanghai Stock Exchange trading system on August 6 and 7, accounting for 0.18% of the companys total share capital.
By April 30, 2020, the plan includes but is not limited to centralized bidding transactions, bulk transactions and other means, with a cumulative increase of not more than 800 million yuan in company shares. In the fixed increase plan announced in 2017, Nanjing Hi-Tech had planned to subscribe no more than 72.6857 million shares.
Why does Nanjing High Tech abandon its fixed increase and increase its stake in Bank of Nanjing in the secondary market? Wang Jiyue, a senior investment banker, analyzed the possibility to the reporter of Economic Observer: The rule of fixed increase and reduction leads to a decline in risk and return. If you want to increase the shareholding, fixed increase does not have too much price advantage, but it is difficult to reduce the shareholding, and the lock-in period is too long, so it is not as good as the secondary market increase.
In addition, Wang Jiyue said that the fixed increase was not only bad for Bank of Nanjing, but also had policy factors that led to the expiration of many companiesadditional approval documents.
Internal Management Pain
The two years that accompany the planned increase are also the painful period of the internal management of Nanjing Bank.
On the third day of the 14 billion yuan fixed growth resumption, the president of Nanjing Bank, Shu Bang-nong, resigned due to work transfer. On May 24 this year, he submitted his resignation report to the board of directors. He resigned from the board of directors of Nanjing Bank, the chairman of the board of directorsrisk management committee, the members of the Development Strategy Committee, the president, the financial officer and the authorized representative of the company. u3002 Later, he went to Nanjing New Rural Group to take office. Subsequently, Hu Shengrong, chairman of Nanjing Bank, temporarily assumed the duties of president.
Shu Xingnong has experienced the development and growth of Nanjing Banks interbank market by borrowing money. He is a veteran of financial market and the first trader of bond industry. He has worked in the bank for a long time since he left his military career in 1994. He has witnessed the reputation of King of Bonds of Nanjing Bank and the pioneer of cultivating a number of bond businesses. People.
Before the resignation of Shu Bang Nong, a major event that shocked the market occurred in Nanjing Bank, namely the Dai Juan case, which was taken away for investigation in February this year. Dai Juan was once one of the most competent generals of Shu Bang Nong. At noon on February 20, the official website of Nanjing Bank announced that Dai Juan, general manager of the asset management business center of Nanjing Bank, Dong Wenzhao, deputy general manager of the capital operation center, and Li Yan, deputy general manager of Xinyuan Fund Management Co., Ltd., the investment institution of Nanjing Bank, could not perform their duties normally due to personal reasons.
Since 2012, the growth rate of bond investment balance of Bank of Nanjing has exceeded the growth rate of total assets. In 2015, the growth rate of bond investment balance reached the highest point, up to 69.7% year-on-year, and then began to decline. In addition, in carrying out actions to rectify the disorder in the banking market, the interbank business is the first to bear the brunt.
In the first half of this years performance report, Nanjing Bank disclosed that its core primary capital adequacy rate was 8.87%, up 0.43 percentage points from the same period last year, up 0.36 percentage points from the beginning of this year, but ranked second among A-share listed banks.
In fact, after its listing in 2007, the Bank of Nanjing has repeatedly issued secondary capital bonds, non-public issuance of RMB common shares and preferred shares to raise additional capital, focusing on the period 2014-2016. For example, in 2014 and 2016, the bank publicly issued secondary capital bonds in the inter-bank bond market, totaling 15 billion yuan to supplement secondary capital; in 2015, it raised 7.922 billion yuan of RMB common shares in private to supplement core capital; in 2015 and 2016, it issued two private preferred shares, totaling 98.4 billion yuan of net capital. 900 million yuan to supplement other primary capital. A total of 32.771 billion yuan was raised in the above five fund-raising activities. Faced with the pressure of capital adequacy ratio, the Bank of Nanjing told reporters: Through structural adjustment, accelerating strategic transformation, increasing internal accumulation as the primary way to improve capital, timely supplement of core first-level capital through non-public issuance, etc. Reporters learned that the attitude of the Bank of Nanjing is that the means of replenishing capital adequacy ratio, such as convertible bonds and sustainable bonds, are being studied. But first, we need to complete the fixed increase, and then study other means of replenishing capital. Source of this article: Responsible Editor of Economic Observation Network: Zhang Mei_NF2100
In fact, after its listing in 2007, the Bank of Nanjing has repeatedly issued secondary capital bonds, non-public issuance of RMB common shares and preferred shares to raise additional capital, focusing on the period 2014-2016. For example, in 2014 and 2016, the bank publicly issued secondary capital bonds in the inter-bank bond market, totaling 15 billion yuan to supplement secondary capital; in 2015, it raised 7.922 billion yuan of RMB common shares in private to supplement core capital; in 2015 and 2016, it issued two private preferred shares, totaling 98.4 billion yuan of net capital. 900 million yuan to supplement other primary capital. A total of 32.771 billion yuan was raised in the above five fund-raising activities.
Faced with the pressure of capital adequacy ratio, the Bank of Nanjing told reporters: Through structural adjustment, accelerating strategic transformation, increasing internal accumulation as the primary way to improve capital, timely supplement of core first-level capital through non-public issuance, etc.