Research On Performance Evaluation Of Commercial Banks Based On EVA

Foreign banks have a large-scale, high-quality assets, advanced management concepts and good quality of service and other competitive advantages, with the large number of foreign banks entering the Chinese market, China’s commercial banks will undoubtedly have a greater impact on operating results, also make China’s banks competition more intense. Moreover,"commercial bank’s capital management approach (Trial)"is issued by China’s Banking Regulatory Commission on June7,2012.The approach clearly established with the "Basel III" standards of capital regulation requiring banks capital adequacy ratio of not less than8%and a capital adequacy ratio of not less than6%, core capital adequacy ratio shall not be a less than5%.As the changes in the business environment as well as regulatory requirements more stringent conditions, domestic commercial banks to profit at the core of the performance appraisal system is no longer applicable to the current commercial bank. Since profit targets focused on short-term commercial bank operating performance evaluation, without considering the business risks and cost of equity capital, resulting in commercial banks in the practical application of ubiquitous narrow perspective, reliance on the scale, ignoring risk situations, its shortcomings have become increasingly prominent.Therefore, building a line with current commercial bank operating characteristics and requirements, focusing on commercial banks for sustainable development, reflecting the concept of maximizing corporate value of new business performance evaluation system has been imperative.In this paper, combining the particularity of China’s banking industry and the actual situation of China’s commercial banks, through adjusting the net operating profit after tax (NOPAT), total capital (TC) and the weighted average cost of capital (WACC) build the China’s commercial banks EVA evaluation model, According to11commercial banks2007-2012EVA performance measurement and evaluation found that China’s commercial banks EVA values were greater than zero, the four state-owned banks operating results are far better than the seven small national joint-stock commercial banks, and11commercial banks the lowest EVA value in2007, increased in2008. decreased in2009, showed a gradual upward trend in2010-2012; This article also compare EVA performance evaluation of the indicators to the traditional indicators and found the traditional performance evaluation indicators are generally overestimated commercial bank operating results, while EVA indicators can be better, more comprehensive and objective to the evaluation of commercial banks really create value. Finally, according to five aspects of camel evaluation system selected seven specific indicators as explanatory variables, the rate of return to Economic Value Added (REVA) as the dependent variable, using multiple linear regression analysis, measuring commercial the correlation between REVA of banks and their drivers level, and according to the regression results on how to improve the operating results of China’s commercial banks to make recommendations.