Commercial Bank Value Assessment Method Based On The Residual Income Model To Explore

At present, our country is vigorously promote the reform of financial system, the restructuring of state-owned commercial Banks listed, foreign strategic investor and private capital are involved in China banking industry, in addition, mergers and acquisitions, restructuring, and other capital activities also increasingly frequent between the commercial Banks. Value evaluation is the key factor in this series of capital operation process,for so long, due to the lack of necessary theoretical research in this field, the point of view "state-owned commercial Banks on sale" is intensified, therefore, find out the key factors that affect commercial bank value assessment in theory and the key factors that affect commercial bank value assessment play a key role for Banking reform in our country and even the entire financial system reform in order to promote.In the applicability of traditional enterprise value assessment methods for the analysis and combined with the particularity of commercial Banks, In this paper, using the method of residual income to evaluate value of commercial Banks. Residual income refers to the concept of company’s net income minus the company shareholders to pay. Residual income model not only absorbed the traditional discounted cash flow model of the time value of money and risk and benefit and so on merits, especially from the Angle of enterprise value creation, rather than consider problem of profit distribution. Ohlson puts forward modern residual income model overcomes the traditional rights and interests of the valuation model of several major defects, (Including forecasts for future data lead to the increase of uncertainty and model of an infinite and lead to using the method of econometric test etc), on the basis of three assumptions through a series of mathematical change finally gets the basic form of the residual income model.Residual income model focus on the future profit of the company, but the current accounting measurement is based on historical cost, the financial statements of the enterprise is not involved in the future of the surplus, In order to make the residual income model can more effectively use the information in the enterprise financial statements, this article introduces du pont financial system to improve the model, trying to build a model and function between the various financial indicators, the improved model is able to more effective and reliable.In the empirical analysis, This paper select Industrial Bank Co. as evaluation objects, on December 31,2014 as the appraisal base date, through to the main business income, net profit margin, asset utilization, rights and interests multiplier, equity capital cost model variables is analyzed after the forecast, get the value is 19.79 yuan per share. Through the comparison and analysis the bank stock prices and the change trend in recent years, this paper argues that Industrial Bank Co. shares to some extent been underestimated, suggest investors to buy.