Research On Mixed Mergers And Acquisitions Of Commercial Banks In China

Mergers and acquisitions(M&A)is one of the important ways for companies to grow rapidly.At the end of the last century,the wave of mergers and acquisitions began to sweep across the world.Among them,bank mergers and acquisitions arouse widespread attention.Most commercial banks in developed countries have experienced unprecedented integration in this process.In recent years,with China's economy entering a new normal,the interest rate marketization continuing to advance,and the rapid rise of Internet finance,the development of China's commercial banks is facing enormous pressure and severe challenges.With the gradual opening up of financial supervision and the rapid development of modern financial science and technology,under the combined influence of external politics and the economic environment,achieving group-based and comprehensive operations will be an inevitable choice for China's commercial banks to face challenges in survival and to adapt to development trends,which is also one of the important ways for these banks to achieve transformation and upgrading.In the process of a group-based and integrated business transformation,China's commercial banks began to try to acquire or control non-bank financial institutions by acquisition or integration,and obtain multiple financial licenses in order to accelerate the process of their grouping and integration strategy.Whether the merger and acquisition process of China's commercial banks is successful and such mergers and acquisitions can have a positive effect has been continuously concerned by financial institutions,markets,and relevant government departments.Therefore,this paper selects China's latest case of mergers and acquisitions of banking and trust company,namely Shanghai Pudong Development Bank's(SPDB)acquisition of Shanghai Trust,and conducts in-depth research on this case from aspects of merger and acquisition plan and M&A performance.It attempts to explore the feasibility of establishment of banks as a state-owned financial holding platform for China's commercial banks.In the analysis of the M&A plan,this article explains the reasons for the existence of the Shanghai Trust's continuing division before the M&A in the plan,expounds the major advantages and deep-level reasons why the Shanghai Pudong Development Bank pays the M&A consideration by using the share payment method,and finally simply to commented the price of the transaction.In the test of M&A performance,this article uses the combination of event study method and financial ratio analysis method to conduct in-depth analysis.This study finds that:(1)The merger and acquisition transaction has been recognized by the market.Investors are optimistic about the Shanghai Pudong Development Bank's acquisition of Shanghai Trust,creating a short-term wealth effect for the shareholders of Shanghai Pudong Development Bank.(2)Shanghai Pudong Development Bank's merger and acquisition of Shanghai Trust has a positive effect on the improvement and adjustment of the operating structure of Shanghai Pudong Development Bank.It will also play a positive and guiding role in the future financial integration of Shanghai Pudong Development Bank Group.But it will have little impact on the growth ability for Pudong Development Bank Group.The impact of risk prevention and control capabilities is relatively limited.(3)For Shanghai Trust,the profitability,growth ability,and risk prevention and control capability of SPDB as a controlling shareholder have all significantly improved,indicating that this merger has produced a more positive effect on Shanghai Trust's operating performance.The improvement of risk prevention and control ability is mainly related to the large-scale increase of registered capital by Shanghai Pudong Development Bank after the merger and acquisition.Based on the analysis of the M&Aplan and M&A performance,this paper finds out the substantial problems existing in Shanghai Pudong Development Bank's acquisition of Shanghai Trust and puts forward corresponding solutions about the reasons and the improvement methods for the issuance of share purchase assets,related suggestions for the follow-up integration of M&A,,and the "parent-child strategy" to increase the capital adequacy ratio.Finally,through the case analysis of mergers and acquisitions in the banking industry,this article concludes the three aspects of China's mixed industry mergers and acquisitions,mixed business management,and mixed industry supervision.Among them,mixed mergers and acquisitions suggest that commercial banks pay close attention to policy guidance in the process Besides,it should have a full understanding of relevant laws and regulations,and deal with the details of mergers and acquisitions flexibly.Mixed business operations reveal that commercial banks should define their strategic intentions clearly,and formulate groupings and syndicates according to their own characteristics.Business strategy,focusing on subsequent integration of mergers and acquisitions in operations,and strictly managing the risk of mixed operations;mixed industry supervision enlightens the relevant regulatory authorities to pay close attention to the synchronization of the development of supervision and organization,change the existing regulatory ideas,and gradually improve the supervision and management of mixed industries.The integrated financial supervision and control system will truly enhance the quality of supervision.