This article**: Times Weekly Author: Zhou Jie.
On the road of innovation and development, individual rural commercial banks are also trying their best to "break the situation".
Recently, Sunong Bank (603323SH) released the eighteenth issue of equity financing project promotion, and disclosed three innovative enterprise projects to the public, namely a medical technology company, a pharmaceutical company, and an Internet of Things technology company.
The Bank's equity financing projects are equity financing matchmaking, mainly to serve the Bank's technology-based enterprise customers. On December 20, a person in charge of the relevant department of Sunong Bank told a reporter from Time Weekly.
The promotion of Sunong Bank's equity financing project can be said to be a case of investment banking business for banks.
So, in the face of the sluggish growth of traditional business in the banking industry, can investment banking business become the "dark horse" of commercial banks' innovative business?
In order to gain an in-depth understanding of this problem, from December 13th to 20th, the Times Weekly reporter interviewed the relevant person in charge of the above-mentioned Sunong Bank, as well as two experts - Zhu Keli, executive director of the China Information Association, and An Guangyong, senior consultant of the Credit Management Committee of the National Mergers and Acquisitions Association, and analyzed the significance, characteristics, differences, prospects, impacts and suggestions of the banking industry to carry out equity financing business from different perspectives.
The significance of investment banking to the transformation of banks.
In the transformation and upgrading of the banking industry, investment banking business is of great significance, but it also faces many difficulties. In this regard, the relevant person in charge of Sunong Bank and two experts gave their views and analysis from different perspectives.
This business is an important measure for the Bank to improve the structure of the company's credit customers, which will help enhance the company's business operation capabilities. The relevant person in charge of the above-mentioned Sunong Bank said in an interview with a reporter from the Times Weekly.
Zhu Keli, executive director of the China Information Association, has a similar view. Zhu Keli believes that this kind of business can not only bring more benefits to banks, but also significantly enhance banks' comprehensive financial service capabilities and market competitiveness.
With the continuous opening of the financial market and the intensification of competition, the transformation and upgrading of the banking industry has become one of the important trends in the industry. Zhu Keli told the Times reporter, "Equity financing and investment banking business, as an important part of the banking business, can not only bring more income and profits to the bank, but also enhance the bank's comprehensive financial service capabilities and market competitiveness." ”
However, An Guangyong, an expert of the Credit Management Committee of the National Mergers and Acquisitions Association, also pointed out that in the current severe economic situation, the decline in corporate investment willingness may bring certain constraints to the transformation of banks.
The equity financing and investment banking business of the banking industry are facing severe challenges in the context of the current severe economic downturn. In such a situation, the transformation and competitiveness of banks may be limited, as the willingness of companies to invest has dropped sharply, and the need for financing has decreased. An Guangyong said.
Characteristics of equity financing business carried out by local banks.
Compared with large state-owned banks, local banks have unique advantages in carrying out equity investment banking business.
The relevant person in charge of Sunong Bank said that local banks have a deeper and richer understanding of customers, have greater support for inclusive finance, and are more willing to give credit support in the early stage of enterprise growth.
I believe that local banks such as rural commercial banks have certain advantages over large state-owned banks in carrying out equity financing and investment banking business, such as in-depth understanding of the local market and enterprises, rapid response ability, and flexible decision-making mechanism. Zhu Keli said in an interview with a reporter from Time Weekly.
However, local banks also have certain disadvantages. For example, local banks generally lack equity investment subsidiaries, which makes it difficult to directly participate in equity investment. In addition, the capital strength of local banks is relatively weak, the talent pool is insufficient, and the risk management and control capabilities need to be improved. Therefore, local banks need to give full play to their own advantages when carrying out equity financing and investment banking business, and at the same time strengthen risk management and control, and improve the professionalism and standardization of their business.
Local banks are likely to face more pressure in the current economic woes, as local businesses are more vulnerable to the adverse effects of the local economy. Compared to large state-owned banks, local banks may lack sufficient capital strength and risk diversification, making them more vulnerable to debt defaults and corporate failures. An Guangyong replied to a reporter from Time Weekly.
Local banks have their own unique advantages in equity financing business, but they also face many difficulties. How to maintain their own advantages and competitiveness in the fierce market competition is a problem that local banks need to think about and solve.
The difference between banks and securities firms in carrying out investment banking business.
In terms of investment banking business, banks and securities firms have different positions and characteristics, and each has its own advantages and disadvantages. So, compared with brokers, what are the advantages and disadvantages of banks in investment banking business?
The relevant person in charge of Sunong Bank believes that the advantage of the bank's investment banking business lies in the customer group and the type of industry is wider, and the disadvantage is that the depth of industry research is not enough.
The advantage of banks in investment banking business over securities companies lies in their huge customer base and financial strength, as well as rich experience in risk management. However, the shortcomings of banks in investment banking business are mainly due to their relatively little understanding and operational experience in the capital market, as well as their ability to execute in certain professional fields such as IPOs and mergers and acquisitions. Zhu Keli pointed out.
An Guangyong believes that "banks may face some disadvantages in the investment banking business compared to brokers. As companies invest prudently, banks have less need for financing, while brokerages are typically more focused on capital markets and investment banking, with greater risk management and market sensitivity. ”
In terms of investment banking business, the advantages of banks over securities firms are mainly reflected in their huge customer base, financial strength and rich experience in risk management, while their disadvantages lie in their lack of depth of industry research and market sensitivity. Therefore, in the process of carrying out equity financing and investment banking business, local banks need to focus on giving full play to their own customer resource advantages, and should also focus on strengthening industry and market research to improve the professionalism of their business.
The investment banking business is still in the exploratory stage.
Regarding the prospects and return expectations of banks doing equity financing business projects, Zhu Keli said that this needs to be evaluated according to the specific project and market environment. Generally speaking, industries such as medical technology, pharmaceuticals and Internet of Things technology all have broad prospects and potential, but they also need to consider factors such as industry competition, technology risks, and market demand.
An Guangyong pointed out that under the current economic difficulties, the prospects of equity financing projects may be greatly affected. Enterprises are investing conservatively and the market is sluggish, and these projects are facing greater operational uncertainty, which may lead to pessimistic return expectations.
From an investor's point of view, An Guangyong suggested that "equity financing projects of local banks face greater risks, and investors should remain cautious." Investors are advised to fully understand the market and industry conditions and carefully assess the risks and reward potential of the project when considering participating in such projects. ”
Zhu Keli also gave his own advice: "From the perspective of investors, the equity financing projects of local banks have a certain investment value, but it is also necessary to pay attention to the balance between risks and returns. When choosing an investment project, investors need to have an in-depth understanding and analysis of the project itself, the company's situation, the market environment, etc., and also need to pay attention to the bank's risk management and control capabilities. ”
The relevant person in charge of Sunong Bank told the Times Weekly reporter: "The banking industry is still in the exploration stage of equity financing and investment banking business, and the model is not yet mature, but the increase in the proportion of direct financing is the general trend." ”
Under the current economic situation, it is both meaningful and difficult for the banking industry to carry out equity financing and investment banking business, and it needs to be continuously innovated and optimized to adapt to the changes and needs of the market, and provide better services and support for the development of science and technology enterprises and industries.