Empirical Study Of Reform Of Stock Right Splitting On Public Banks' Performance

The public banks'performance is foundation of market efficiency and gives essential impact on healthy development of security market. Based on theory on deputy cost and separation of ownership and governance , improving public banks'performance depends on mature corporate governance mechanism shaped gradually and owner structure is its most important factor. Prior to reform of stock right splitting, the shares belong to state and legal entity are different with personnel's in right and interest. It results serious system defect of security market. State-owned shareholder aims at administration target achievement but not shareholders'interest maximization. Legal entity-owned shareholder demand on governance mechanism is more than the former one but is limited by their lower shares percentage. Personnel shareholder has no capability and is passive to influence public company's performance. Moreover, due to the shares owned by state and legal entity are not negotiable in market, external supervising corporate governance is not available and then such abnormal cases emerge as preferring to stock financing, holding shareholders'interest first, and overriding minority shareholders'benefit. The former three attempts on stock right splitting are worth to be analyzed for experience learning. It's concluded why the former attempts failed and then how to design and execute on such points this times to get key factors influencing banks'performance. The latest reform is to improve public banks'performance based on alteration of stock financing demand and operation target closer to all shareholders'interest maximization. Empirical Study focuses on performance comparison before and after stock right splitting reform and relative analyses.EVA indicator is adopted to evaluate public banks'value added for share-holders in periods accurately. During the course of EVA calculation, interim financial data of five public banks before and after stock splitting reform is collected as basic data. Then net operation profit and total capital are adjusted with prevalent method and that related to bank business characteristic. EVA per share before and after stock right splitting reform indicates public banks'performance trend, which is just as former theory conclusion .Then the correlation coefficient between EVA per share and such factors as shares'nature and concentration are analyzed for empirical study result confirmation.The conclusion from this empirical study is as followed: public banks'EVA per share after stock right splitting reform is higher than before representing better management achievement. Moreover, shares'nature and concentration give less impact on public banks'EVA, which interprets the positive influence of stock right splitting reform on public banks'performance. Last chapter suggests correcting stock financing preferred demand and optimizing the security market supervising together with optimizing independent director system to improve public banks'performance.