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Performance Evaluation And Incentives In China's Commercial Banks, The Economic Value Added

Posted on:2008-03-20Degree:MasterType:Thesis
Country:ChinaCandidate:J M SuFull Text:PDF
GTID:2209360212986910Subject:Finance
Abstract/Summary:PDF Full Text Request
Commercial banks play a crucial role in the modern financial system, its operating efficiency will affect the level of national economic development. Furthermore, in the wake of China's accession to the WTO after the financial field open to China's commercial banks increasingly facing serious challenges, China's commercial banks are required to take effective measures to carry out accurate self-assessment, positioning, and enhance their own competitiveness.This requires commercial banks to carry out an effective performance evaluation and to continuously improve the value of the bank itself, and the economic value added (EVA) in these areas can provide useful ideas and methods.EVA is net operating profit after tax for deduction of capital input for the cost of parts. It is not only considered the debt capital also considered the cost of equity capital, making EVA value reflects an increase in the value of the company and the company's operating results more truly. EVA calculation, the need for traditional accounting statements, a series of adjustments, to eliminate traditional accounting theory of the operational performance of authenticity, and the debt capital and equity capital of the total costs, Thus, we can get the result of EVA. On the basis of this, we will make the performance evaluation, as well as staff incentives.Currently, EVA in many banks of United States and Europe have widely application. They established a complex information management system, and calculated EVA of the overall bank, branches, products, Customer Manager and customers, and made performance evaluation and staff reward on basis of these. Commercial banks of China need to study experience of foreign commercial banks application of EVA and construct their own performance evaluation system, including performance evaluation, incentive mechanisms, and so on. Ultimately, we will achieve objective of raising the value of commercial banks.
Keywords/Search Tags:EVA (Economic value-added), commercial bank, performance evaluation, incentive mechanism
PDF Full Text Request
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