Strategic expectations are officially delivered.
In February 2019, since obtaining the first "Class B lead underwriter of debt financing instruments for non-financial enterprises in the interbank market" in Northwest China, Chang'an Bank has established "commercial bank + investment bank" as one of its differentiated strategies. A few days ago (October 31), Chang'an Bank was officially promoted to "independent lead underwriter of debt financing instruments for non-financial enterprises in the interbank market", which means that there will be no need for joint and can independently carry out investment banking business.
According to public information, Chang'an Bank is not only the first bank in Northwest China to be promoted to "sole ownership" after the new regulations, but also the only "unlisted bank" in the western region. Under the first requirement of "based on local characteristics", we predict that this tool will highlight the empowerment of Shaanxi's real economy.
Readers who are familiar with the financial market know very well that the main places for ordinary enterprises to issue bonds are the exchange market and the interbank market, and the licenses obtained by banking institutions are all from the interbank market, and the scale of the interbank market is quite huge, and public data shows that the scale of its bonds accounts for more than 2 3 of the overall bond market.
Many people have also noticed that the National Association of Financial Market Institutional Investors (NAFMII) issued the "Rules for the Evaluation of Member Markets Related to the Underwriting Business of Debt Financing Instruments of Non-financial Enterprises of the National Association of Financial Market Institutional Investors (2023 Edition)", which abolished the classification of A and B lead underwriters (regional differences in business development), bringing benefits to the direct financing of local enterprises.
Chart: Chang'an Bank's investment banking business scale in recent years.
However, Chang'an Bank's upgrade to "sole ownership" is not purely benefiting from the new policy, but has already been laid out. Because the qualification of "sole master" is actually obtained through the "progressive system".
In 2017, Chang'an Bank obtained the "pre-license" of the lead underwriting qualification, the underwriter, and then further obtained the Class B lead underwriter qualification in February 2019, which has lasted four years and eight months. More importantly, Chang'an Bank has steadily promoted the growth of business scale. According to the data, since obtaining the underwriter qualification, Chang'an Bank has accumulated 26 customers and 63 underwriting businesses with an amount of more than 28 billion yuan, including 35 interbank debt financing instruments with an amount of more than 19 billion yuan.
On the basis of the "gradual system", "license upgrades" are naturally in demand. In the latest list of 72 "general lead underwriters" of debt financing instruments for non-financial enterprises, banks account for nearly 8% of the total number of 54, and only 18 brokerages. Financial lollipop statistics found that among the 54 banks, Chang'an Bank is not only the only seedling in the northwest, but also the "only non-listed bank selected" even if it is enlarged to 12 provinces and cities in the west.
Chart: List of banks in the western region that have obtained the qualification of general lead underwriters.
What is more difficult than the "gradual system" is that the underwriting of interbank bonds also has the pressure of "big banks sinking".
Through Wind Search, Financial Lollipop found that the main customer groups of Chang'an Bank's investment banking business are "mainly AA rating", and it is not difficult to see that small and medium-sized banks do not have an advantage in grabbing AAA customers. In the face of this real market, the biggest motivation that has supported Chang'an Bank's exploration for more than four years is to "promote specialization with differentiation".
The investment banking business team of the corporate finance department of Chang'an Bank told the financial lollipop that the investment banking department of Chang'an Bank is more like a "brokerage embedded in the bank", and the biggest belief is the determination of the head office to "deeply cultivate Shaanxi", and finally formed a model of "commercial bank + investment bank" to promote each other.
An important reminder is that it is based on the "specialized" approach that Chang'an Bank's investment banking business has met the requirements of various indicators for promotion to "sole master" before the new regulations as early as September 2020.
Inspired by the spirit of the first financial work conference, the financial lollipop sorted out all the projects of the investment banking department of Chang'an Bank and clearly saw the seven major characteristics.
1: Depth with local credit customers**:
As a bank deeply involved in the real economy of Shaanxi, Chang'an Bank is closely combining "credit and direct financing" to provide customers with comprehensive financial services. 65% of the cumulative bond issuers are local enterprises that have carried out credit business, and the longest service time for customers is 12 years, which is reflected in the refinement of serving the regional economy as a city commercial bank.
You must know that Chang'an Bank, which was established in 2009, is only 14 years old.
2: Investment banking business extends to all cities in the province:
In Shaanxi's regional bond market, Xi'an is the obvious "main battlefield". According to wind data, Xi'an, Yan'an, Xianyang, Yulin, Weinan and Baoji accounted for the proportion of interbank bonds. 3%。Correspondingly, Chang'an Bank's investment banking business has been involved in the above cities, and since 2019, the proportion of underwriting business in various cities is. 1%, the high coverage rate of various cities in the province is extremely rare among many lead underwriters in Shaanxi.
Chart: Geographical analysis of Chang'an Bank's investment banking customers since 2019.
3: Cultivate customer growth with a pioneering mentality:
AA "It is difficult for the main body to issue bonds is the consensus in the industry, and its difficulties are reflected in multiple dimensions such as material production, issuer cultivation and investment. But even so, Chang'an Bank is still patient and deep, and the data shows that it underwrites more than 60% of the main bonds of "AA and below", of which 50% of customers can be regarded as business "wasteland".
The results are gratifying, and with the patience of Chang'an Bank, it has witnessed the rating improvement of many customers.
4: Market-oriented guidance to help issuance:
"Guidance" and "support support" are the most direct embodiment of Chang'an Bank's customer service, as detailed in the first "Class B" annual report: Chang'an Bank's "direct financing" exceeded 10 billion. Internally, between the investment banking department and the investment department, market-oriented pricing has basically been formed, and it will eventually stand on the position of a game of chess for the whole bank, so that customers can reap "successful financing and downside".
5: Create space for the long-term debt mechanism:
As a provincial-level city commercial bank, Chang'an Bank supports the number and amount of bonds issued by ** investment and financing platform companies to maintain more than 40% of the total plate. Financial Lollipop believes that under the requirements of "establishing a long-term mechanism for preventing and resolving local debt risks" put forward by the ** Financial Work Association, Chang'an Bank has actually created valuable time and space for the transformation of Shaanxi's platform.
6: Highlight the first order to lead the innovation demonstration:
In Chang'an Bank's historical investment banking business, there have been a number of first-of-its-kind projects.
For example, in June 2020, the country's first "Enhanced M&A Debt Financing Plan" was successfully issued to achieve 500 million yuan of debt financing for Gaoxin Holdings, which is innovative in "turning debt into shares", and uses the main corporate bond financing funds as the equity capital increase of the subsidiary, the high-tech cloud rail construction party, thus cleverly solving the capital problem.
Figure: High-tech cloud rail design route.
In the field of supporting private enterprises, which has attracted much attention recently, the only debt financing of private enterprises in Shaanxi in recent years, "Yaobai Cement 500 million case", is also underwritten by Chang'an Bank. As a city commercial bank, the characteristics of serving the regional economy are reflected in this.
7: Attract 10 billion funds from other cities into Shaanxi:
According to the data, under the premise of ensuring the issuance, Chang'an Bank has introduced more than 10 billion yuan of funds from outside the province. At the same time, the amount of investment in the "bank" has gradually dropped to 30%. Under the realistic conditions of relatively limited capital, we believe that its "endogenous power has basically matured".
After 4 years of exploration, we have deeply benefited from "a game of chess for the whole bank".
The investment banking department of Chang'an Bank is only a "miniature team", consisting of 2 "post-80s" and 4 "post-90s", and its performance of nearly 30 billion yuan in 4 years is largely due to the precise cooperation of "branch docking and landing + full guidance of the head office".
In order to continuously improve the contracting business, the investment banking department of Chang'an Bank also continues to conduct no less than 2 examinations and 10 special trainings for the sub-branches every year, and the investment banking team of the corporate finance department of Chang'an Bank is committed to integrating investment banking solutions into corporate financial solutions to serve customers and the whole bank.
Under the expectation of high-quality financial services to boost the real economy, Chang'an Bank's investment banking business has locked in four major force points.
The first is service innovation-driven.
Taking the "science and technology innovation bond" as an example, in the face of the resources of nearly 200 national-level specialized and new "little giants" in Shaanxi and the 10th largest number of listed companies on the science and technology innovation board in the country, Chang'an Bank said that it would further guide the direct financing of science and technology enterprises. In June 2023, it has successfully assisted Shaanxi Construction Co., Ltd. (600248) in issuing the company's first and 2023 first science and technology innovation notes for construction enterprises in the northwest region.
Second, the transformation of the service platform.
Chang'an Bank is tracking the new product of the National Association of Financial Market Institutional Investors - "transition bonds", essentially using financial instruments to guide traditional platforms to explore market-oriented business. Financial Lollipop learned that the target project has now completed early negotiations and entered the implementation stage.
The third is to serve private enterprises.
At a time when it is urgent to boost the confidence of private entrepreneurs, the head office of Chang'an Bank, on the basis of consistent support, is conducting in-depth discussions on the "25 Articles for Supporting the Private Economy" just promulgated by eight ministries and commissions, and the investment banking department has taken the bond financing of private enterprises in the province as a priority task.
The fourth is to serve the key industrial chain.
The 24 key industrial chains are the core support of Shaanxi's "strong industrial base", especially to achieve cluster development covering the upstream, midstream and downstream. Chang'an Bank is currently committed to promoting the debt financing instrument scheme for the industrial chain.
At this point, in the face of the current situation of "sinking big banks" and "comprehensively pinching the top", we can draw a conclusion: it is not easy for Chang'an Bank to upgrade to "sole master", especially under the guidance of "based on local characteristics", this "No. 1 commercial bank in Northwest China" has entered a new stage of "a game of chess in the whole region".
At the 2023 mid-year work conference, the management of Chang'an Bank said that it would rationally use the "investment banking thinking" to play a good role in the combination of the company's financial business and improve the comprehensive marketing, linkage marketing and systematic marketing service capabilities of the customers of the General Battle Group.
"Investment banking thinking" appears in commercial banks, which is relatively rare in our records of local banks, and its important support point is most likely investment banking business.
On the day of the landing of the "sole master" qualification, we heard that in 2024, the goal of Chang'an Bank's investment banking business is to "break 10 billion in a single year"!