Study On EVA Performance Measurement System Of Commercial Banks

With the gradual improvement of commercial bank corporate governance ,The maximum value as the final goal of the commercial bank's operation and management has become the common knowledge of ownership,bank manager and operator.Then how can we measure the ability of value creating of bank and build the simulating mechanism.which is the lone of value creating ?Today,a new method generally applied in the world is economic value the management performance of all levels institutions under its rule.The institution of EVA effectively promotes the development of business and increases the growth of inner value of the bank.EVA is different between return on an organization's capital and cost of the capital.lt involves the cost of the debt and the equity,and represents the true value added from the operations.EVA is one of the tool of perforing measurement radical.There are two things important on calculating EVA.Firstly it need to estimate the cost of equity and gets the WACC and the cost of the capital invested.Secondly,some account items have to be adjusted in which value creating activities are distorted according to the general accounting principles to ensure the result can be demonstrated comprehensively.Therefore, we elaborate deeply the connotation of EVA theory and use the successful experiences in applying EVA to judge management performance and stimulate with western banks as reference, this paper analyses the interior and exterior environment in which our commercial banks are facing in applying for EVA as the criteria of management performance and premium distribution of all levels institutions under its rule based on their actual situation in reality operation, and accordingly puts forward the basic thought and the problems need to be disposed in carrying out performance evaluating and stimulating after the adoption of EVA model.Currently, There exists great difference between our commercial bank and the operating environment of EVA management. But as long as our commercial bank continue to reform deeply and try to create the opportunities,EVA management must be totally carried out and will bring more and more benefit to our commercial bank.