Study On The Value Valuation Research Of Commercial Bank Based On Residual Income Model

With the full liberalization of the financial industry, foreign banks settled the mainland market, the inter-bank mergers, acquisitions, asset sales, restructuring assets have become frequently, understand and evaluate value has played more and more important role in the bank development. How to determine the commercial banks' valuation is a problem should to be resolved. It direct related to the next step of China's financial sector reform, to the long-term sustainable development of China's financial industry.From the overall development of China's banking sector, the ongoing commercial banks to improve corporate governance structure, strengthen internal controls, add value and improve risk prevention system to create a new round of system reform as the main contents and management innovation. China had completed initial shareholding system reform at the same time, clearly pointed out operating principles that is maximizing the value of a bank.Due to our country's national conditions, the value assessment theory which established above the west developed capital market is not fully apply to China's enterprises, in the practice, we still don't have a wide range of value management concept, only in the when assets reorganization, bank merger and acquisition did we need to asset the target enterprise's value.The reason is, on the one hand, our country's capital market establishment is late; the valuation methods in the market are not mature; on the other hand, we have carried out the property rights reform of commercial banks only in recent years, new joint-stock commercial banks listed on the stock issue is also start in recent years. According to the already-listed joint-stock commercial banks of the prospects, market announcement materials, we found our country still has not paid much attention to the value problems of commercial banks.Shenzhen Development Bank used a book value to assess its first public stock in 1989, while the SPD Bank used price to earnings ratio method, China Minsheng Bank and China Merchants Bank had a significantly progress in the pricing assess, China Minsheng Bank used income approach method, China Merchants Bank used market comparison approach and discounted cash flow method, but they didn't disclose the pricing details. Hua Xia Bank used the price-earnings ratio, book value with market conditions trends to determine the issue price in 2003;Bank of Communications paid attention to the price-earnings ratio, book value of banks with asset quality, profitability model, future revenue growth expectations, the improvement of management techniques pricing to determine the issue price in 2005; Industrial Bank and CITIC Bank had adopted the object to inquiry to determine the issue price range, accumulated within the range of tender inquiry, combined with market trends to determine the issue price in 2007.Facts have proved that traditional bank valuation methods exists many defects and cannot assess a bank's intrinsic value very well. Therefore, we cannot copy the models of generalized, but should profound insight the banking sector, analyze the operation mechanism of commercial banks, sum up the key factors which influent its value, to find a more reasonable method to assess the value of our commercial banks in theory and practice.This article mainly uses the comparative analysis and the theory and the real diagnosis unify research technique. The full text divides into four major parts:the first part makes an overview assessment of the enterprise value which is the theoretical basis of the full text. At first, this part pointed out the commercial bank's value and value assessment's concept, then elaborated commercial bank's typical characteristic as well as characteristics.The second part described several mainstream's bank valuation methods in our country (such as property value approach, market comparison approach, income approach), pointed out their limitation which exists in the utilization.The third part first introduced the RIM estimate's method, and analyzed its rationality, proved we should choose this kind of method to our country commercial bank's value in theory. Then it constructed the commercial banks valuation model on the basis of RIM valuation.At last, paper does a case study which makes SPD Bank as an example. It used RIM model and further demonstrated RIM valuation method is reasonable from the practice.