An Analysis On The Road Of The M&As In China Banking Industry From The M&As Wave Of Global Banking Industry

Mergers and Acquisitions are important means of exterior transaction strategies for enterprises to realize capital outspread. As one of the development strategies, M&As are not only greeted by enterprisers, but also commonly concerned by economists of China. The M&As in finance industry are concerned by society due to theirs core position in modern economy and special position in enterprise M&As. Moreover, the M&As in banking industry are concerned by people more because of the core position in finance industry and typical feature.In 1990s, accompanying with the globalization of economy, with the financial deregulation and the cutthroat competition in world banking industry, the world banking industry raised a heavy wave of M&As. Banks in different countries implemented the M&As strategy one after another to expand the scale of operation, to increase the strength of capital, and to improve the competitive power and ability of resisting risk, so that they could insure their leader positions in some region or in the world. The voice of "Too big to fail" and "Big is beautiful" are prevailed in the world banking industry. However, instead of the precondition of success, M&As are the only viable means for banks to expand the scale of operation. The outspreads of scale due to M&As for banks by all means do not mean the improvement of efficiency, or do not help to realize economy of scale, or the only factor to insure the security of banks. Therefore it is not advisable for banks to pursue the scale only, or to put the reduction of cost and improvement of efficiency to backseat. In terms of commercial banks, scale, quality, benefit and structure are all the objects of operation and development, but benefit is the central object. Obviously, benefit is more important than scale. Therefore, banks should pursue an optimum scale and attach importance to scale of benefit in M&As. Only the outspread of scale strategy that can bring good benefits is the perfect development strategy. So optimum scale is the rational choice for banks.Using theories and demonstration research methods, the paper starts from the study of basic theory on bank M&As, then analyzes the characteristics, cost benefit and optimum scale of bank M&As in details. In the mean time, combining with the situation of China, the paper brings up some views to advance the M&As in China banking industry steadily and improve the competitive ability of China banking industry.