The Empricial Analysis Of Chinese Commercial Banks' Merger And Acquisition

In the course of the development of the international banks,cross-boarder M&A has become one of the main methods of its realization international operation.With the opening of China's financial industry on Dec.11 th in 2006,international financial service trade in our country has entered a new era.Faced with the competition of the large commercial banks around the word,banks in our country,especially state-owned large banks,listed on the completion of the share reform,should shift their strategy from Introducing to the combination of Introducing and Going out and go out actively.In the process of international operation,it is a economic proposition of strong practical significance that how to expand business area and business scope and improve bank performance through international mergers and international acquisitions,thus on the competition of the international finance,we can compete more financial resources and strengthen the financial strength for our country.The subject of this paper is based on the M&A events of China Merchants Bank and China Minsheng Bank to put forward constructive suggestions for solving this problem.The article is divided into five parts altogether.The first part is introduction,mainly about the background of the subject,research purpose and significance,research methods and the innovation and shortage.The second part summarize the M&A review of commercial banks.It is the theoretical basis of this article.This part defines the important concepts of the article first.Second,it introduces the related theory and research method of this paper and determines the method of this article are event study method and financial index method.At last,it reviews the existing literature at home and aboard,summarizes the achievement and finds insufficient.The third part introduces the present situation and development course of commercial bank overseas M&A in our country and lists two cases of commercial bank overseas M&A in our country,China Merchant Bank Hong Kong wing lung Bank m&a and United Bank Minsheng Bank m&a.It introduces the m&a background on both sides and describes the specific reasons of China Merchants Bank and China Minsheng Bank,including the m&a theory and realistic meaning.It also describes the whole process of m&a of two banks and finally summarizes the results.The forth part is the empirical research.It uses event study method first,building model,fitting out the expected return and then get excess returns and accumulated excess returns and studies the short-term performance of two banks.Second,it applies the method of financial indicators,dupont analysis in specific to compare and analysis the return on assets and return on equity of before and after merger financial index and studies the long-term financial performance of m&a.After the comparison of two cases studies,the fifth part summarizes China Merchants Bank Hong Kong wing kung bank m&a and China Minnsheng Bank m&a according to the theoretical analysis and empirical conclusion and gives related strategies and suggestion.Core idea of this article is the scale economy effect,scope economy effect.synergistic effect that are emerged by commercial bank transnational m&a,can improve business performance of bank by influencing the different aspects of the banks performance in commercial bank profitability and growth ability enhancement.In this paper,on the base of summarizing the existing research results,according to the contrast of the two overseas m&a case of China Merchants Bank and China Minsheng Bank,inspects the commercial bank transnational m&a impact on the operating performance of economics mechanism and establishes the performance of commercial bank management index and scoring standard.The main conclusion of this paper is as follows.During the short term after m&a,China Merchants Bank gained positive abnormal returns and the short-term performance is improved.This is largely because that the China Merchants Bank and Hong Kong wing kung bank have the similar historical and cultural background and are complementary with each other in business.At the beginning of the mergers and acquisitions,it showed synergistic effects,though not very obvious,but it did improve the performance of the bank.However,it reduced the short-term performance of China Minsheng Bank,because there were less similar case to China Minsheng Bank before and the target bank deliberately concealed the truth,which is largely increased the m&a difficulty when evaluating the price,thus increased the uncertainty of m&a.Therefore,China's commercial banks should be encouraged to improve business performance by transnational m&a on the reasonable choice of the m&a area,target countries and scientific choice of the bank scale and market competition strategy.