EVA-based China’s Commercial Banks Performance Management System Research

Since the beginning of the21st century, China’s banking sector has started to enter therack of rapid development and the competition between the banking industries is intense.Since2004after the share reform of state-owned commercial banks, how to create morevalue for shareholders has become a core issue for China’s commercial banking business.Especially after the foreign bank presence in China in2007, the living environment faced bydomestic commercial bank to become more severe. How to enhance the corecompetitiveness of commercial banks has become the focus of widespread concern in thetheoretical and banking sectors, while the economic value added(EVA)indicators reallyreflect the enterprise value and capital appreciation.Look at the history of the evolution of the evaluation criteria, to maximize the value ofstage has now entered. For commercial banks, the establishment of the EVA performancemanagement as the core, has become the current development trend. The EVA index fullyconsider the financial costs and the cost of capital to be able to reflect the real businessbenefits, help to guide enterprises to achieve the goal of maximizing the value of business.Departure from the EVA theory and the theory of performance appraisal, a briefintroduction of the EVA formula and the current general accounting adjustments mattersEVA has the advantage, and by comparison with traditional financial indicators ofperformance evaluation obtained; build a performance evaluation of China’s commercialbanks based on EVA framework and incentives, and the concept of economic capital andeconomic capital management brief analysis of the simultaneous analysis of the advantagesof the introduction of commercial banks in the economic capital; selected four listed banks inShanghai Pudong Development Bank, China Merchants Bank, Industrial Bank and HuaxiaBank as the study sample, according to the2011annual Report of the banks disclosed,according to the formula of EVA brief calculation, and its calculation results are comparedwith traditional financial indicators; bank combined with the author years practicalexperience of EVA in the pricing of banking and financial products and customers integratedmarketing use of the practical application of analysis; finally concluded, and put forward avision and recommendations for China’s commercial banks in the use of EVA time, hoping to be helpful to China’s commercial banks operating results and operating decisions.