Research On The Financial Risks Of The Transnational M&a Of Chinese Commercial Banks

With China’s power rising,Chinese banks have realized the importance of strengthening the global layout. To expand the market share and reduce the cost of overseas investment, Chinese banks, including the State-owned commercial banks,joint-stock commercial banks and the policy banks, are actively promoting the strategy of globalization and participating in more transnational M&A on the basis of the continuous improvement of deploying globally. But the process of M&A has not all been plain sailing,which holds a lot of risks, especially financial risks, the financial risks in transnational M&A affect the whole process and determine the success or failure, even a small mistake will lead to the eventual failure. AS the present research on commercial banks’ transnational M&A mostly concentrate on their causes, M&A performance, in contrast,the research on the M&A risks, especially the research on the financial risks is a bit of less,so this text will place a stress on the financial risks in different stage of M&A,and then to propose some related effective recommendation by analyzing the financial risks.This text firstly introduce the present research on the problem of transnational M&A of banks in China after stating the current international economic development situation.Next discuss the related theory of the transnational M&A of banks,such as the theory of risk management and the theory of scale economy. And then analyze the current situation of the overseas M&A of China and all kinds of financial risks which may appear at different stages. Shortly thereafter take CMBC making an acquisition on United States Union Bank as an example to specifically analyze the financial risks of the overseas M&A of banks in China, and then draw some conclusions and lessons from its failure. According to the conclusions of the case analysis, combined with the realities in China and the development of international situation, pointing out some problems associated with financial risks that exist at this stage in China’s commercial banks in overseas M&A,then put forward some measures to cope with the financial risks of transnational M&A ofChinese commercial banks.This paper mainly used the methods of specification research and case study,combined with large reading on literature information, meanwhile taking into consideration some related management and economy theories to analyze the financial risks of Chinese commercial banks’ transnational M&A. Through the analysis, this text will propose some suggestions and measures that can be taken to deal with the financial risks in overseas M&A of banks in China.