Equity Structure And Commercial Bank Value

Having studied the literature on equity structure of commercial banks and bank value, I find there is not much literature on this issue. And I find out that there are two opposite views about the correlation of the above two. According to the two views, I raise two questions: (1) Is there correlation between equity structure and bank value? (2) If there is correlation, what kind of equity structure will be helpful to increase bank value? To answer these two questions, I observe a lot of commercial banks in the world. With the data listed in the tables, after I analyze the characters of equity structure of commercial banks and bank value separately, I find out that most banks in the world are controlled by one or several large shareholders, which are mostly corporations. Banks which are widely held, controlled by state and controlled by family are not as many as expected. Furthermore, these three kinds of banks seem to concentrate in several regions.In this paper, I also study the correlation between equity structure and bank value through the theoretical and empirical analyzing. And I find that the two has indirect connections. Equity structure can influence capital structure, which can influence bank value. After sorting the data in detail, I get a spectrum in which commercial banks have higher valuation. On the basis of the above conclusion, I go on analyzing the present situation of Chinese state-owned commercial banks and the potential problems during the reform of commercial banks. I hope to give some suggestions to the reform of banks. Finally, I give a conclusion to this paper and summarize the insufficiency.The innovation in this paper is that I study and sort more than 400 banks of 97 countries around world carefully and get some valuable conclusions, and give some suggestions to the reform of Chinese state-owned commercial banks as well.