Hina’s Banking M&A Valuation Method

With the full liberalization of the financial industry, mergers and acquisitionsgradually by the favor of the banks as the financial sector have a significantimpact on the economy-the banking sector even more so. Mergers andacquisitions not only enable the bank to quickly expand the scale can also beeffective to enhance market competitiveness, mergers and acquisitions has becomethe banking industry in a strong level among the international arena. How todetermine the equity value of China’s banking assessment is a key issue, it isdirectly related to the next step of China’s financial sector re form is the smoothprogress of the relationship to the long-term sustainable development of China’sfinancial industry. Due to China’s national conditions, set up in the westerndeveloped capital market-based valuation theory is not fully applicable to banks inChina, our country should be based on national conditions and characteristicsstudy of bank mergers and acquisitions process more reasonable valuationapproach.China’s banking M&A key to success lies in the ability to accurately assessthe value of bank mergers and acquisitions. This paper focuses on the method ofvaluation in the process of China’s banking M&A research. First, domestic andinternational bank mergers and acquisitions and valuation status quo, drawing onrelated research, to build t he line of research. Second, introducing the relevanttheoretical knowledge of bank mergers and acquisitions and valuation, has laid atheoretical foundation. Again, through the study of traditional valuation methodsand valuation methods as well as the ad vantages and disadvantages of variousmethods to adapt the scope of comparison, combined with China’s nationalconditions and characteristics of China’s banking mergers and acquisitions todetermine, through a variety of methods to combine only more compre hensive andaccurate assessment of the value of bank mergers and acquisitions in China. Of the value of our bank, M&A value-added generated by the combination ofthe characteristics of the banking sector and M&A activity, the establishment of anew model of EVA method and valuation of real options method.