A Study On Domestic Bank M&A Under The Situation Of Market Exit

The global industry is experiencing the 5^th consolidation wave which has seen M&A cases unprecedented in both number and size. It has impacted international finance, especially the banking industry. The finance deregulation and the intensified competition have fueled finance M&As which are cross-sector, cross-national, and large in scale. As a result, financial conglomerates, which operate in banking, insurance, security, and trust, have come into existence.The on-going reform of Chinese banking industry is governed by the rule of jungle. Some banks get stronger and some banks become losers. Compared to the international arena, the M&A in Chinese banking industry is still in its infancy characterized by the strong teaming with the weak or the weak-weak formula. The M&A process also provides an exiting path for those not competitive enough to stay in the market. The paper studies M&A in Domestic banking industry under the situation of market exit; presents case studies in the area, and makes recommendations for future reference.The paper is divided into four sections. Introduction Section provides background and significance for the study, the framework and chief contents of the paper, including innovations and problems for further studies. Chapter 1 focuses on the development of related concepts, reviews bank M&A theories in western countries and related literatures in China. Chapter 2 is empirical study, concluding with four findings: 1. M&A in domestic banking industry was initiated and instructed by central government and is developing gradually in market principle; 2.The conforming after bank M&A is essential to the success of the M&A; 3. Supervisions from administrative bodies are necessary to the successful implementation of bank M&A; 4. New innovative models of bank M&A are to be developed for the Chinese market. Chapter 3 makes recommendations for a healthy market of domestic bank M&A.