Research On Performance Assessment Of H Branch Small Business Center In Anhui CCB

Recently, with economy capital having been the hot issue of Chinese banking industry, The<management method of commercial banks’ capital> issued by China Banking Regulatory Commission on8th June,2012, integrates core requirements of Basel Accord Ⅱ and Basel Accord III, hence further improves the sensitivity of capital towards risks. Maximizing shareholder value has become the commonly accepted business objective and the ability of creating value to shareholders has been the primary consideration in evaluating an enterprise by capital market. The assessment in banking industry gives more attention to economy capital, which is the ability of the value creation under risks. The two core factors of economy capital assessment are EVA and RAROC. With the socialist market economy being perfected, small and medium-sized enterprises have grown to be a significant strength and engine in the development of national economy. China Banking Regulatory Commission also gives great support and favorable policies to the financing and development of small enterprises. Due to the particularity that small companies often undergo great risks, it becomes extremely important to study the performance assessment from the risk perspective.This paper is divided into five parts. The first part is the introduction of this paper outlining the background of topics, research significance, and the viewpoints of scholars both domestic and foreign. The second part includes theoretical studies and concepts. This part introduces the performance assessment and other concepts on the basis of economic capital, and at the same time, it expounds the methods of performance assessment based on economic capital. In the third part, the essay analyzes the current situation of performance assessment of the H branch of China Construction bank, and points out it does not fully take advantage of the concept of economy capital management and emphasizes too much on volume assessment in designing its indices and weights. The forth part is analysis of the problems of assessment structure existed in the small business center, after giving an interpretation of economy capital assessment theory, the paper analyzes and redesigns performance assessment indices and weights in detail and constructs a new system which balances risks and gains. In part five, the paper gives initial discussion and evaluation of the application of the newly built assessment system and also peeks some defects in the assessment system and suggests some improvements to the defects.The innovation and characteristics of this paper is that although EVA has been widely used in the assessment within branches, it is constrained to the longitudinal assessment in branches and lacks the concept of economy capital risks in the horizontal assessment within the commercial banks; RAROC is a target applied in credit management and going to be an important basis in evaluating the performance of branches and departments. This paper introduces EVA and RAROC to the performance assessment of H branch small business center. Through the case analysis, volume assessment takes disadvantages to the development of small business center. Given that small enterprises are always big in number, small for their volume and have great risk, we have to build management model and assessment system which balances risks and gains. The performance assessment based on economy capital is very meaningful to the development of commercial bank.