Our Country Commercial Bank Cross-border M&a Strategy

Since the entry to WTO, China insists on the strategy of deepening opening-up and involving in Globalization more actively. Finance is the core of modern economy. In2006, foreign-invested banks can conduct RMB business in China, which means China’s financial market get into a brand new era. At the same time, China’s commercial banks are also deepening the reform, several major state-owned commercial banks’restructuring and listing process has been completed. To face the increasingly fierce competition from major financial giants worldwide, large domestic commercial banks with ample capital and strong profitability should accelerate the pace of global business; enhance their competitiveness, and better service for the real economy. Cross-border M&A is a positive globalization way of expansion. With the Chinese-funded enterprises "going out" strategy and RMB internationalization strategy, Chinese commercial banks must seize the unprecedented opportunities by means of cross-border mergers to develop.The paper mainly focuses on the strategic significance of cross-border mergers of Chinese commercial banks. Combined with the empirical analysis, the paper discusses how China’s commercial banks to choose the path of cross-border mergers and acquisitions, and efficiency and risk prevention are also concerned. The paper has five chapters. The first chapter introduces the research background and significance, the literature review of commercial bank M&A and cross-border M&A, the research ideas, innovation and weak points. The second chapter analyzes the necessity of global operation first, then, the strategic significance of cross-border M&A is described. Finally, combined with the success of foreign banks in cross-border mergers and acquisitions experience, we study the feasibility of cross-border mergers of commercial banks in China. In the third chapter, the history and current situation of China’s commercial banks to expand overseas are introduced first, and then summarizes the characteristics of the completed cross-border M&A transactions from domestic commercial banks. The fourth chapter firstly analyzes the M&A course on behalf of China’s major banks-ICBC. Secondly, an empirical analysis has been made on ICBC’s financial situation after the M&A courses, compared to the financial data from ABC and CCB. The fifth chapter discusses the specific path of the future cross-border mergers from China’s commercial banks, and analyzes the M&A risk, and put forward policy recommendations to our government.