The Study On Overseas M&A Performance Of Chinese Commercial Banks

With the acceleration process of global financial integration, Commercial Banksof China have started the way of international operations themselves. The internationaloperations of Commercial Banks of China mainly come true through two ways: firstly,establishing branches or branch locations in the target countries, secondly, enteringoversea market through M&A(mergers and acquisitions) banks or branch banks in thetarget countries. At present Commercial Banks of China mainly through the second wayto enter oversea market, mainly because on the one hand it can bypass the limit of lawsand regulations of financial sector, on the other hand it can rapidly enter the targetcountries. China’s financial sector fully opened at the end of2006, oversea mergers andacquisitions of Commercial Banks of China start a new course, not only the cases ofmergers and acquisitions increase, but also the size of mergers and acquisitions has anupward trend. Can Commercial Banks of China achieve the improvement of itsperformance and enhance international competitiveness by oversea mergers andacquisitions? In the post-crisis era, the issue must be considered before China’scommercial banks start oversea M&A(mergers and acquisitions). It is significant toChina’s oversea M&A(mergers and acquisitions) to study this issue.This article studies bank performance affected by oversea M&A in boththeoretical and empirical sides. Firstly this paper reviews domestic and foreign literatureof bank M&A; secondly interprets the meaning of M&A performance, sorts outdynamics theory of oversea M&A of bank, introduces the DuPont system of financialanalysis and principal component analysis which used in this paper; thirdly describesthe status of oversea M&A of Commercial Banks of China, in this part this paperclassifies the cases of oversea M&A of Commercial Banks of China and selectsrepresentative cases in order to carry out empirical research; finally studies the typicalcases with the method of principal component analysis empirically. The results of this study show that: The post-merger performances of M&A sidebanks which have oversea acquisitions are generally better than pre-merger, but M&Aside bank’s performance sooner or later will have varying degrees of decline. In a word,M&A side banks which have experienced oversea M&A have improved performancecompared with pre-merger, indicating that M&A can improve performance of M&Aside bank.