We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is a Joint Stock Commercial Bank?

Helen Akers
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A joint stock commercial bank is owned by several different investors. These investors may be private companies located in foreign countries, governments, or individuals. Ownership is typically obtained through the purchase of bank stock or equity. Each investor owns a certain percentage of the bank's overall equity, which is a large enough amount to acquire substantial voting rights and influences the financial institution's strategic policies.

When several primary investors have a significant equity ownership in a financial institution it is considered a joint stock commercial bank. These banks often have large portions of their available equity or stock purchased by foreign investors. For example, a bank in China may have an investor from the United States that owns 20 percent of its stock and another investor from Japan that owns 15 percent. The remaining 65 percent may be owned by the bank's founders and common shareholders.

A key characteristic of a joint stock commercial bank is that it sells a certain amount of equity shares in exchange for ownership and strategic control. By purchasing equity, investors infuse capital into the bank and hope to get a return on their investment by ensuring that it turns a profit. The joint stock model means that several significant investors must partner with each other to formulate the bank's market strategy, future development, and customer policies. It is similar to the idea of a joint venture, where two major corporations partner to create a new company, product, or service, or to distribute a product in a foreign country.

Commercial banks are financial institutions that primarily deal with business clientele. These customers tend to maintain larger account deposits and take out loans that would qualify as a capital expense, which means that the loan's balance would usually be amortized or expensed over a period greater than one year. A joint stock commercial bank's primary investors tend to be large entities, such as corporations and government agencies.

Some countries that have government-controlled banks are moving towards a joint stock commercial bank system. This is largely because this type of banking system encourages free enterprise and loosens restrictions on the money supply. Tighter money supply control may shrink an economy's potential development and put restraints on the country's access to global resources. By opening up ownership and control to outside investors, a business bank can develop new market strengths and create employment opportunities for local citizens.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Helen Akers
By Helen Akers
Helen Akers, a talented writer with a passion for making a difference, brings a unique perspective to her work. With a background in creative writing, she crafts compelling stories and content to inspire and challenge readers, showcasing her commitment to qualitative impact and service to others.
Discussion Comments
Helen Akers
Helen Akers
Helen Akers, a talented writer with a passion for making a difference, brings a unique perspective to her work. With a...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.