A Study On Evaluation Of Domestic Commercial Bank Share

Since the financial industry was opened to foreign investors at the end of 2006, domestic commercial banks have faced more challenges. Now we are speeding up and deepening financial reform. Then the issues about restructuring financial system, the reforming and listing of state-owned commercial banks, foreign investors' entering the bank, etc., will increase a lot. And bank evaluation is just the base of these capital activities. However, bank is a special industry and there is less research on it at present. Therefore, how to choose a proper bank evaluation method is an important problem crying out for solution.The paper combines theoretical analysis and empirical study to research a proper bank evaluation method. In the study, I compare traditional four main valuation methods, analyze the characteristics of bank and present situation of our capital market, point out the limitations of bank evaluation based on traditional valuation methods, and by analyzing the core parts of bank value, provide a method of goodwill and net asset for bank, that is, constructing bank share value model by analyzing its factors.This study indicates that bank is a special industry and there are many limitations of bank evaluation based on traditional valuation methods, and further shows that the method of goodwill and net asset is more suitable to bank and commercial bank share value is composed of net asset and bank goodwill which includes customer resources, system resources and bank credit, and that there are other factors also affecting bank value, such as bank franchise value, economic growth and the development of bank industry, financial safety, and so on. Besides, according to bank share value model designed in the study, the result shows that bank share value is correlated positively with net asset, the load and deposit balance, rate of return on common stockholders' equity, and the operating time.