Ye Tan: Fill The Capital Pit With Preferred Shares

< p > banks have to supplement core capital adequacy at a high price.

Core capital is also called tier one capital and equity capital. Core capital includes paid capital or common stock, capital reserves, surplus reserves, undistributed profits and minority interest.

Ancillary capital includes revaluation reserve, general reserve, preferred stock, convertible bond, mixed capital bond and long term subordinated debt.

Although the profitability of China's banking industry is strong, it is always in the process of capital shortage and continuous refinancing to replenish capital adequacy ratio.

This raises suspicion that the scale is too aggressive, or the actual earnings and earnings per share are not as good as those disclosed.

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In the past 5 years (2009 ~2013), the weighted average return on net assets (P) was 22.1% after deducting non recurring gains and losses.

This is pretty beautiful data. It's hard to explain the financing of Pu's release.

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< p > data show that the dividend yield of listed banks in 2013 was 5.64%, creating a new high interest rate in the banking sector since 2000, but the market did not buy it.

According to the plan announced by the two banks of pupu and Agricultural Bank of China, the dividend yield of preferred stock is about 6% to 8%, which is higher than the average yield of bank financial products, which is roughly the same as that of common stock, which indicates that market funds are more intense.

For example, the annual dividend yield of Pudong Development Bank in 2012 is around 6%, the dividend tax of 5% is about 5.6%, and 30% of Pudong Development Bank's profit is paid dividends.

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< p > as a preferred stock, investors invest a lot of money, and the investment income is obvious. It can get a relatively safe annual yield of about 7%, and can share some banks' monopoly profits.

The risk of investors is also obvious. Bank profits can not guarantee earnings. Non mandatory dividends can not be accumulated to the next year, and can not be sold back. Banks can have redemption rights in five years. The provision can be converted into common stock and will not be lost.

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< p > with the issuance of preferred shares, market funds are further strained.

It is reported that the next step to disclose the preferred stock plan is Bank of China, about the middle of May, the total issue size is about 100 billion yuan, after the completion of the procedures will be completed wholesale, mandatory stock conversion terms with the previous two.

ICBC's preferred stock process is relatively slow, and the Construction Bank will not issue preferred shares for a short time.

In the four major industries, the order of preference shares is agricultural bank, Bank of China, ICBC and China Construction Bank.

The market needs capital at least about 200000000000, which does not include joint-stock banks, city commercial banks and so on.

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< p > > a href= "//www.sjfzxm.com/news/index_c.asp" > common stock < /a > whether the investors can benefit from it depends on the a href= "//www.sjfzxm.com/news/index_c.asp" > profitability > /a >, and the share price.

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< p > the issuance of preferred stock seems to be beneficial to common stock investors at the current high return on net assets and capital return of banks.

If the market maker Fang Rui calculates that if the Pu issue 30 billion yuan in full, the capital adequacy ratio of the company will increase from 10.97% to 12.22%, and the capital adequacy ratio of the first class will increase from 8.58% to 9.82%.

The return rate of Pu's capital return is roughly the same as that of roe. Assuming that the initial dividend yield of Pu's preferred stock is 8.5%, the 30 billion yuan capital can increase the net profit attributable to the parent company's common shareholders to 4 billion 80 million yuan, an increase of 10% over the 2013 net profit.

This is the expectation that under the optimistic situation, bad debts will not rise, scale oriented changes and profits will continue to soar.

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< p > > a href= "//www.sjfzxm.com/news/index_c.asp" > investors < /a > finally came a promise. The Agricultural Bank of China promised that "in the case of no major emergencies, the operation of the bank was materially affected, the earnings per share attributable to shareholders of the parent company in 2014 could return to the level of 0.51 yuan per share in 2013.

At present, the remuneration of the chairman, President, supervisor, executive director and other senior managers of the bank will be approved by the relevant departments according to the performance of the bank. If the operating performance is down, it will have a significant impact on the remuneration of the senior management of the bank. "

Performance is linked to salary, and hope can be put into practice.

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< p > if the profits of banks do not rise or the bad debts are exposed, ordinary shareholders will suffer greatly.

ABC said that assuming that the total size of the preferred stock issue is 80 billion yuan, the dividend yield is 6% and full dividends, the net profit allocated to the common shareholders of the bank can be reduced by 4 billion 800 million yuan without considering the financial return of the fund-raising fund and the dividend of the preferred stock can not be deducted before the tax.

Moreover, banks will continue to issue preferred shares and replenish capital abroad.

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< p > issuing preferred shares at high interest rate is the next choice for ordinary financing channels to play a role.

The day when the quality of banking assets is rising and the profits are stable and the bad debts are gradually digested under the background of marketization of interest rate and exchange rate, it is the day when the preference shares are gradually withdrawing from the market.

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