Study On Financial Performance Evaluation Of China Everbright Bank

Commercial banks mainly represent the financial and economic image of a country and play an irreplaceable role in safeguarding the security and stability of China's financial industry and promoting the rapid and sound development of the economy.Therefore,its financial performance evaluation and risk management have become the focus of attention.Financial performance is an important indicator that reflects the business level and management effectiveness of commercial banks.The degree of perfection and implementation status of the final evaluation not only affects the better development of commercial banks themselves,but also affects the level of the entire industry.Taking China Everbright Bank(CEB)as an example,this paper selects the financial data for 2011-2017,and analyzes the operating conditions of CEB by using the indicators economic value added(EVA)through comparative analysis and analytic hierarchy process.Compared with the traditional financial performance evaluation method,when calculating the accounting profit,the economic value added not only confirms and measures the capital cost of the debt,but also considers the cost of equity capital,which is in line with the new requirements of the “13th Five-Year Plan for Accounting Reform and Development”(2016).Traditional financial performance evaluation indicators usually focus on the return on equity and the return on total assets.Such indicators are not the real value indicators and cannot reflect the increase in shareholder wealth truly.The economic value added is the value-centered performance evaluation index,and the goal of financial management is to maximize the wealth of shareholders.The results show that China Everbright Bank's economic growth value for the past seven years is negative,mainly because the capital cost is too high,and the increase in financial leverage will lead to an increase in risk.Therefore,it is reasonable to grasp the boundary of financial leverage and effectively control risks to achieve the expected returns of investors.This paper comprehensively coordinates the three aspects of risk,benefit and scale,and studies the financial performance evaluation of economic value added applied by China Everbright Bank,which reveals the important role of economic value added in the management of commercial banks,and puts forward suggestions on how to better evaluate financial performance.