Research on the Motivation and Effect of Ningbo Bank’s Convertible Bond Financing

In recent years, due to the slowdown in market economic growth, the strengthening of capital flow supervision, and the rise in credit risk, China commercial banks have seen a downward trend in asset quality and capital adequacy ratios. Increasingly stringent regulatory requirements have also made capital adequacy ratios as an important assessment standard. As the profitability of some small and medium-sized banks is worrying, the space for internal capital replenishment such as traditional profit conversion and dividend conversion is gradually reduced. External sources such as convertible bonds have become the first choice for bank financing. Although commercial banks have begun to use convertible bond financing as the main direction of replenishing capital, issues such as the uncertainty of issuance and conversion, the large issuance scale, and the low stock price, and the difficulty of conversion, are still worth noting. This article will take the first china city commercial bank convertible bond "Ningbo bank Convertible Bond" as an example, study the process and effects of its issuance, and provide suggestions for listed state-owned and city commercial banks with convertible bond