Empirical Study On Determinants In Cross-border M&A Of Banks Under The Constraint Of Risk

With economic globalization and financial liberalization, international banking ushered in the fifth wave of global mergers and acquisitions. By the end of the year 2006, Chinese financial sector fully opened to foreign capital in accordance with WTO commitments as a result. Chinese bank industry has to face double competition from domestic and foreign. The global financial crisis breaking in 2008 gave the banks of the developed countries and regions such as Europe and the United States a great blow. Many high-quality banks faced liquidity shortages. Because of China closed financial system and strictly financial management, Chinese bank industry was much less affected by the crisis. With the growing strength of Chinese bank industry, opening up overseas markets becomes its new development goals. Cross-border mergers and acquisitions is a good option to banks for its overseas development approach. However, the cross-border M&A different from domestic mergers and acquisitions, it would face more risks and uncertainties.The thesis analyzed the results of previous studies and tried to sort out the theory of international investment theory and banking M&A theory. By analyzing the case of Deutsche Bank acquisition by Bankers Trust, this thesis summarized the revenue drivers of banks'cross-border M&A from the macro and micro levels. The article also analyzed the risk of the bank M&A and selected the data of bank M&A from 12 countries or regions in Asia-Pacific such as Citigroup and other ten sample banks .Then we made a regression analysis of influencing factors under the constraint of risk from the perspective of macro and micro. Finally, this article studied the reality demand of cross-border M&A of Chinese banks and raises the risk preventive measures. At last, we analyzed the cross-border M&A history of Royal Bank of Scotland and indicated the path which banks cross-border mergers and acquisitions in China should follow.Through this analysis we followed these conclusions. (1) The reason of bank cross-border M&A has two parts. One was the acceleration of external environmental which include the development of economic globalization, national policy changing and progressing in information technology. The other was the promotion of the bank itself basing on the factors of economic, strategic, investment. (2) We found that motives of banks following clients demonstrated cross-border M&A in Asia-Pacific regions. It described that economic integration and investment facilitation was conducive to banks'cross-border M&A. In addition, the information cost (language, culture and control) provided more significant impact on banks cross-border M&A in the Asia Pacific regions. (3) The bank's size and international experience in the bank's overseas M&A showed a relatively strong explanatory power.