Bank Performance Around Stock Listing : Evidence from China

While research on stock listing is abundant, little evidence is obtained for banks that are usually excluded from the research sample, especially for the ones from emerging markets. This paper examines the operating performance of Chinese banks surrounding the stock listing. The results show that stock listings overall contribute to the improvement of bank performance. Among the listed banks, cross-border listed banks outperform domestically listed banks after the listing; coastal banks outperform inland banks; and national banks outperform regional banks. Further tests reveal that the improved performance of bank cross-border listing is associated with increased accounting profitability, core capital, loan performance, and operating efficiency. Moreover, the domestic listing is related to higher growth in revenue, assets, and deposits, but these high growth rates do not lead to better performance. We also find that the stock listing facilitates a lower total risk for inland banks and regional banks. Finally, we investigate what factors beyond financial fundamentals lead to performance difference between coastal banks and inland banks, finding this difference is related to earnings management, market monitoring, information transparency, and regional economic differences