Analysis Of Evaluation Of Commercial Banks Based On EVA Model

Since twenty-first Century, the global economic integration has promoted the development of Chinese banking industry.Especially after China joins WTO, the development of China’s commercial banks has undergone a qualitative leap. As the lifeline of the national economy by the financial industry, it is an important driving force of economic development. In2007July after the outbreak of the financial tsunami, the industrial and Commercial Bank of China (ICBC) to replace the United States Citibank group (CITI GROUP) to become the top banking of the world. This situation is called as milepost China International Economic Rise of the great powers. The main operating target China each big bank shareholders to Bank senior management set to strengthen corporate governance, improve the enterprise structure, and finally achieve the maximization of enterprise value. Shareholders and executives to accurately evaluate the performance of the bank, we must use a scientific and rational calculation method to measure bank performance. However, social and economic conditions have been hitherto unknown change leads to very high scientific and reasonable evaluation of difficulty, traditional accounting indicators have been difficult to adapt to the current complex and harsh market environment. Therefore the use value assessment system of scientific and reasonable is more and more important to bank value research highlights.The traditional value assessment method is relatively simple; mainly have two kinds, namely, absolute and relative valuation method, valuation method. The relative valuation methods are the Price to Earnings Ratio, Price to Book value Ratio and Price to Sales Ratio, price index is the value of the enterprise. The absolute valuation method is through the enterprise management status to predict the intrinsic value of the enterprise. Method of absolute value is mainly divided into two kinds:one is the cash flow discount pricing model, mainly the dividend discount model and the model of discount cash flow model; two is the BS option pricing model etc..In the early1990s, as a new performance evaluation model and effective management system, economic value added (EVA) caused a great sensation in the circles of theory and practice. For the commercial banks of China, EVA theory has an important significance in building internal scientific performance management system to deal with the banking industry comprehensive foreign opening challenge.