The Research On Performance Of Commercial Banks Based On EVA

In recent years, with the development of financial innovation, the world economic integration and the financial globalization, the global banking are experiencing tremendous changes. The banks of various countries are facing increasingly fierce competition. At the same time, along with the reform of China’s financial system, the commercialize degree of Chinese economy rise ceaselessly. The internal and external environment of China’s banking business is undergoing tremendous changes. These derived from regulatory requirements, competition, financial innovation and internal management lag challenge, forcing the Chinese commercial banks to consider how to achieve their value added business objectives.Economic value added is the net profit after subtracting all the capital cost. It considers not only the cost of debt capital, but also the cost of equity capital, so it makes the final result really reflect the operating results of the enterprise.This paper introduces the EVA method and discusses the calculation model. Then the EVA performance valuation of the16listed banks during the year2005and the2010are calculated. It shows that the operating performance of commercial banks is not optimistic, and the value of shareholder is damaged in different degrees when the capital cost is considered. The aim of this paper is not only to calculate EVA and EVA returns, but also to analyze the basic factors that drive the EVA of the bank, so we can make the corresponding countermeasure to improve the bank performance. The paper chooses the factors through the macro environment, industry level and internal environment. The results show that, there are six main factors influence the REV A, such as the tax burden, capital, risk management and business structure. Then, some corresponding suggestions are proposed:Commercial banks should promote EVA management concept, build up the operation and performance evaluation system based on the EVA theory. It should be useful to provide valuable reference for business strategy formulation and strategic decision-making.