Liu Ke
Recently, the top management said that the restrictions on the proportion of foreign shares in banking and insurance institutions will be abolished, including the restrictions on the proportion of foreign equity in financial institutions that participate in shares, acquire and increase capital. In other words, foreign capital can now hold 100% of the equity of banking and insurance institutions, achieving full control.
Affected by this news, some listed banks with relatively large foreign holdings have performed well in recent days, such as Qilu Bank, which rose on Friday, and its largest shareholder is the foreign-funded Commonwealth Bank of Australia, with a shareholding ratio of 1628%；Bank of Beijing, which quietly hit a new high, has the largest shareholder of ING Bank of the Netherlands, with a shareholding ratio of 1303%；Bank of Qingdao, which has risen nearly 10% in the short term, has the second largest shareholder of Intesa Sanpaolo, with a shareholding ratio of 175%；Chengdu Bank, which has risen by more than 20% from the bottom, has the second largest shareholder of Hong Leong Bank of Malaysia, with a shareholding ratio of 1976%；Bank of Xi'an, the leading city commercial bank, has the largest shareholder of Bank of Nova Scotia, with a shareholding ratio of 1811%；The largest shareholder of Bank of Nanjing is BNP Paribas, with a shareholding ratio of 1524%。
In fact, many large banks used to have foreign bank holdings, and they were all well-known banks, such as Citigroup once held about 20% of the shares of Shanghai Pudong Development Bank, and Huaxia Bank's second largest shareholder used to be Deutsche Bank. However, due to various reasons, these foreign banks have withdrawn from the ranks of the majority shareholders of the above-mentioned banks. Therefore, we need to analyze whether foreign banks will make a comeback after the introduction of the new policy, and which bank will be favored. From the previous and current shareholding experience of foreign banks, it can be seen that it is nothing more than these conditions: it is best to be a bank in an economically developed area, and it must have a national business license, and the most important thing is that the actual controller is not very strong, and the equity is relatively dispersed.
At present, A-share listed banks in which foreign banks still hold shares basically meet the above conditions. But there is a problem that the foreign banks that insist on holding shares are not yet big banks. For example, the strongest Dutch ING Bank is an asset management group ranked among the top 10 or so in the world, which is relatively good, and BNP Paribas will only rank 123 in the world's top 500 in 2023. Others, such as Intesa Sanpaolo, are only ranked 383rd in the Fortune Global 500 in 2023. Therefore, what kind of foreign banks can be attracted back now is more important than whether there are foreign banks back. Moreover, foreign banks are basically not the best, if the early stage is gone, it will take a long time to come back now.
With regard to the new policy of "abolishing the restriction on the proportion of foreign shares in banking and insurance institutions," another point that should be noted is that foreign capital can control 100 percent of financial institutions in order to fulfill its WTO accession commitments, and this clause is two-way. In other words, domestic financial institutions can also reverse buy overseas banks to accelerate the globalization of RMB assets. From this point of view, it is even more significant, after all, our banks are also very high in the world, and it is more likely that taking advantage of the advantages of foreign bank shareholders to "go overseas" is the icing on the cake. Therefore, banks that choose "strong alliances" have more medium and long-term value, strong foreign banks have vast overseas resources, and strong domestic banks have rich family backgrounds, making it easier to "go overseas". From this point of view, in terms of the current foreign shareholding of listed banks, the two leading city commercial banks, Bank of Beijing and Bank of Nanjing, seem to have more opportunities.