A Study On The Efficiency Of China’s Banks Cross-border M&A

With the development of economy and the opening-up of capital market in china, ourcommercial banks face increasingly fierce domestic and overseas competition whileforeign banks begin to enter our financial market，cross-border merger and acquisition hasbecome an efficient approach to cope with worldwide challenges and improvecomprehensive competitive power for Chinese banks. It is of great significant for ourbanks to research the topic as of weather cross-border mergers and acquisitions couldbenefit Chinese banks in enhancing efficiency and improving manage system andinternational competency. This paper aims at directing Chinese banks to improvecross-border M&A efficiency through the deep study of Chinese banks cross-border M&Acurrent situations, purposes and efficiency.This paper firstly analyzes the status quo and features of our banks M&A based onthe illustrations of our banks M&A cases. Then it analyzes the purpose of Chinese bankscross-border M&A according to the relevant theory of bank M&A purpose. In empiricalstudy, this paper choose two influent case that is ICBC and BCB to estimate the efficiencyof cross-border M&A by financial rate analysis and factor analysis, and the efficiency ofthe two banks has same trait, the empirical result shows that bank’s efficiency descendafter M&A, though it began to improve after several years’ development, M&A leadsbanks to a long trend of enhancing banks efficiency.This paper lastly find the disadvantages of affecting our banks M&A efficiency basedon the analysis of the M&A purpose and empirical study, including deficiency of M&Alaws and polices, single areas of M&A targets, lacking of control system after M&A andrisk estimate system. Then this paper provides some measures to improve Chinese bankscross-border M&A efficiency from the views of enhancing Chinese banks competency andimproving M&A external environment.