The Research Of Risk Management For M&A Loan Business Of Bank Of Shanghai

The China Banking Regulatory Commission released the Guidelines on the Risk Management of M&A Loans of Commercial Banks on 6 December 2008, which aim to provide the legal basis to allow qualified commercial banks to launch M&A loan business. It is not only a good opportunity but also a severe challenge to the banking industry in China. On one hand, M&A loan business as a new point of growth adds the variety of bank business, but on the other hand, it requires a high level of risk management of commercial banks due to its high risk.Since the promulgation of the Guidelines, many Chinese banks have attempted to engage in the new business. This thesis adopts Bank of Shanghai as the study object. The development of M&A loan business of Bank of Shanghai is circumscribed by the level of risk management.This thesis combines theories of commercial bank management, risk management and M&A theories to analysis the key points of risk assessment including strategic development, legal compliance, overall risk, operation, finance and any other risks related to M&A deals.The thesis holds that Bank of Shanghai should follow the principle of entire process management; The project group and the risk assessment group should assess the credit risk of the loan independently; Concern particularly to the prerequisite of the approval before extend loans; Strengthen the management of loan agreement; Pay particular attention to the post-loan management.The thesis recommends Bank of shanghai to develop M&A loan business as follows: Strengthen the build of the specialist group; combine with syndicated loan; combine with financial consulting business; strengthen the cooperation with property exchange and support the M&A of private enterprises.