The Efficiency Of Cross-border Mergers And Acquisitions Of Banks In China

Throughout the history of international banking industry, most of the large international banks were grown by the way of cross-border M&A. In recent years, although Chinese banks grow fast, they are still large local banks. So internationalization is an inevitable choice for Chinese banks. The lower cost caused by the recent RMB appreciation and the chance created by the financial crisis give Chinese banks the opportunity to practice cross-border M&A. especially, Chinese banks have tried some cross-border M&A lately and they will go on implement this strategy furthermore in the future. So how the action of cross-border M&A influenced the banks'efficiency is an issue to be studied.This paper is to study the above question. First, we introduced the basic theory of bank's efficiency, the motivation theories of bank's M&A and the efficiency motivation theory of bank's M&A. then we introduced the basic theory, models, characteristics and limits of DEA method—the analysis method of this paper. Furthermore, we use the DEA method studied the efficiencies before and after the M&A of three banks—ICBC, BBC, BOC. By comparing the efficiency before and after the M&A, we found that after the M&A the efficiency of the banks declined to some extent. There are many reasons for the decline, and in my opinion, the choice of the target of the M&A and the integration after the M&A should be paid more attention to. At last, we put forward the countermeasures and suggestions from the aspects of the bank itself and the external environment.