Research On The Reason, Strategy And Effect Of The Commercial Banks In China Introducing Strategic Investors

Because of the fast development of China's banking industry and the deepening of the opening-up process, foreign investors step in China's banking market in succession. Up to the end of 2006, 10 joint-stock commercial banks out of 13 have introduced strategic investors, besides the Agriculture Bank of China, three banks out of the big four state-owned banks have introduced strategic investors. What's more, a lot of city commercial banks have also introduced strategic investors. As to the huge market share that the strategic investors have taken, they will play an important role in our banking system, so the research on them is significant.This paper starts with introducing the status quo of our commercial banks introducing strategic investors, then research the reason why the commercial banks introduce strategic investors, the strategy how the commercial banks introduce investors, and the effect that the strategic investors have put on our commercial banks.After introducing the status quo of our commercial banks introducing strategic investors, the third section mainly discusses the reason why the commercial banks introduce strategic investors. Through the research, this paper concludes that introducing strategic investors has very important significance for our commercial banks, so it is inevitable for our banks to introduce foreign investors. The forth section researches the strategy how the commercial banks introduce foreign investors. This problem can be divided into three parts: the selection of investors, the process of introducing, and evaluation of the price for selling share. The evaluation of price is the most important one. The paper has adopted CFD method to evaluate the price of the China Construction Bank's share. The fifth section mainly discussed the effects that the strategic investors have put on our commercial banks. This paper has selected three banks: the Nanjing Commercial Bank, The Industrial Bank and the Bank of China, adopted DEA method to research the impact of foreign strategic investors. The result is that the efficiency of the three banks have improved after introducing investors. Finally, at the last section, this paper has provided some advices for the banks to introduce strategic investors in the future.