Study On The Application Of EVA In The Performance Evaluation Of The China’s Listed Commercial Banks

As the core of modern economy, the financial industry plays a significant role in strengthening macro-control, preventing deflation, controlling inflation, promoting economic development and maintaining social stability, while the banking industry is in the dominant position in China’s financial industry. Against the backdrop of growing globalization, China’s financial industry becomes opening wider to the outside world, as a result, more and more foreign banks swarm into this large and potential Chinese market, establishing corporate banks and achieving their localization. With their solid financial supports, greater corporate management modes, superior product innovation capabilities and flexible marketing strategies, our commercial banks performance, management, products and many other aspects are tremendously influenced and impacted. In the face of such challenge, disadvantages are gradually revealed in commercial banks, business performance, also the lifeblood of the bank, is largely impacted and shortcomings are highlighted in the business performance evaluation system. How to build a scientific performance evaluation system, optimize bank capital configuration, enhance bank’s ability to withstand risks and maximize managers and operators target has became an important issue with urgent need to address in China’s banking industry today.The increasing maturity of market economy and gradual opening of economic environment in China give rise to an innovated performance evaluation system. Currently, foreign banks have generally adopted an innovation indicator, the Economic Value Added (EVA), as the core of performance evaluation. The appearance of EVA is also of much significance to strengthen the management of our listed banks, regulate their mode of operation, and improve their government architecture.Because of domestic EVA study late start, I find that many China’s listed banks EVA remain mostly on the introduction and discussion of the conceptual approach after reading a large amount of literature. There are fewer empirical researches to implement EVA parameters evaluation in our banking industry and figure out a method to improve EVA value. Besides, there are some limitations due to the restrictions of the indicators and data. Therefore, beginning with the current16Chinese listed commercial banks, combining theoretical research and empirical analysis, this paper will explore the application of EVA in the listed commercial banks performance evaluation system. What’s more, it intends to find the factors that will impact the changes of EVA from the listed banks latest data analysis, which has targeted to take appropriate measures to improve the value of bank’s EVA, and in turn, improve the performance results of the bank.