An Efficiency Study Of Commercial Banks' Mergers And Acquisitions In China

At the end of 2006, the banking of our country had been opened to the foreign capital completely. And then, the foreign capital's entering would bring about a large-scale M&A of our local banking. China's banks, especially large state-owned banks holding sufficient capital, how to expand business scope and improve bank performance through M&A, then obtain advantages in the domestic and foreign financial competition, which is a very strong economic theory topic,and it is very actual value to carry out the research.The main line of the paper's argument is the following two main study questions: Whether or not be able to improve bank's performance after M&A, and how to improve bank's performance.First of all, at the basis of previous studies, the author sums up whether the bank can enhance the performance through M&A. Then the author pays attention to the performance of the bank M&A evaluation system, and puts forward theorys and models suitable for China's bank. Secondly,taken china's Bank M&A for instance, we analysize government-led and market-based bank M&A respectively, using the DEA-based methods, supplemented by financial index analysis method. The results show that government-led bank mergers and acquisitions could not improve the bank efficiency, while market-oriented could. Government-led bank M&A in achieving the Government' purpose will have the macro efficiency but at the same time reduce the micro efficiency. Even though government guide, intervention is necessary in the process of reforming, restructuring banking sector and M&A activity, but too much government intervention can only make banks invalid. Finally,According to the situation, four suggestions are brought forward to solve this problem:(1) We should change the government's function in banking M&A,such as perfecting the laws, regulations and rules of bank M&A and improving the abilities of regulatory bodies;(2) pays attention to the post-merger integration;(3) cultivates the intermediary institutions of M&A; (4) prompts certain kind of operation of cross-industries.