The Theory And Empirical Analysis Of Bank M&As Effect In China

Now there two main forms of M&A in Chinese banking sector: the M&As between small and medium-sized bank (for example, joint-stock commercial banks merger urban credit unions) and foreign financial institutions buy the strategic stakes of joint-stock commercial banks and city commercial banks. Definitely the bank M&A will be a trend in the future. A statistic report show that finance industry is the hot and important point of M&A market, and it anticipates that there will be an M&A peak in financial industry. So it is very meaningful to do researches on Chinese bank M&A.Bank M&A has a very long history and much researches on bank M&A have been documented in the western countries, so this dissertation firstly introduces the theories of bank M&As'effects. It can be classified into five aspects: realizing the scale economies, realizing synergy effect, realizing diversification, improving market power and decreasing the transaction costs. Basing on the effect theories, this paper figures out the theory expectation of Chinese bank M&As'effects based on the analysis of Chinese bank practices. It points out that Chinese bank M&As'effect expectations include increasing scale efficiency of small and medium-sized commercial banks; optimizing the market organization of Chinese banking industry and improving its core competitiveness compared with foreign financial institutions. After introducing the methodology, this paper analyzes the typical bank M&A cases in China by the way of DEA, Malmaquist analysis and financial ratio analysis. The empirical evidence shows that Chinese bank M&As'effects are in low level and the efficiency results of Chinese bank M&A cases are not obvious. According to the situation, four suggestions are brought forward to solve this problem. Firstly, prompts certain kind of operation of cross-industries; Secondly, pays attention to the post-merger integration; Thirdly, cultivates the intermediary institutions of M&A; Fourthly perfects the laws, regulations and rules of bank M&A and improves the abilities of regulatory bodies.