The Empirical Research On Driving Factors Of EVA Of Chinese Publicly Listed Banks

According to the promise when China bided for the entrance of WTO, Chinese financial market has been open to all the foreign banks after 11th of December 2006. Since Chinese commercial banks will face fiercer competition from not only domestic counterparts but also foreign commercial banks, it is necessary for us to find a better way to evaluate the banks'performances.In the past two decades, the EVA concept which emphasizes the maximization of shareholders'value has been widely accepted by the developed countries in North America and Europe. The traditional financial evaluation indexes have some unavoidable flaws such as not deducting the cost of capital, neglecting the development of the company and so on. However, the new EVA evaluation method can just overcome these flaws and become more and more used in the multi-national companies. The western banking supervision circle has taken it as a new effective tool for bank performance evaluation, so Chinese commercial banks need the experience to improve ourselves.EVA concept has been increasingly accepted by Chinese commercial banks recently and some of our banks have applied EVA into their practice already. The EVA evaluation system has come to effect in CCB since October 2003 and also in ABC and ICBC two years later. Some other joint-stock commercial banks have taken their moves to try the newly introduced evaluation system. So how do the commercial banks perform based on the EVA model? Are those traditional financial indexes reliable enough? Which are those factors exactly drive EVA of the banks? With these questions, the research calculated the performances of 14 listed commercial banks from 2004 to 2006 and then did an empirical study of the driving factors of EVA, and some corresponding suggestions are proposed as an ending of the research.