The Research On The Performance Of Shanghai Pudong Development Bank Mergering Shanghai Trust

M&A is an important means for modern enterprises to expand their comprehensive strength rapidly.In the middle and late 20 th century,a large number of enterprises around the world carried out mergers and acquisitions,especially bank mergers and acquisitions,and almost all the large commercial banks that ranked top in the global comprehensive strength dominated or participated in M&A transactions in order to help it gain a higher market position.In recent years,our economic growth has slowed into the new normal period,the state has strengthened the supervision of the entire financial market,Chinese capital market has a trend to recover after a brief downturn,and the development of Internet finance is very rapid.All these have brought unprecedented pressure to the commercial banks of our country.Therefore,in such a complex external economic environment and regulatory environment,commercial banks should conform to the trend,and make the challenge of learning an opportunity.Besides,commercial banks should formulate a reasonable comprehensive management strategy to smoothly achieve business transformation.In recent years,many commercial banks in China have taken the road of collectivization and integration through mergers and acquisitions,shareholding or holding other financial institutions.Therefore,this paper selects the typical case of Shanghai Trust merger and acquisition by Pudong Development Bank as a case study.The case analysis is divided into the following parts: firstly,this paper introduces the background of the merger and acquisition and the basic situation of both sides of the merger and acquisition,and expounds the deep-seated reasons of the acquisition of Shanghai Trust by Pudong Development Bank,M&A process and transaction plan.Then,through the event study method and the financial ratio analysis method to test the performance of the M&A,the following conclusions are drawn:(1)The M&A transaction lasted a long time,but through the analysis of the stock price of Pudong Development Bank before and after merger and acquisition,it is found that investors have a positive attitude towards the transaction in the short term,which has enhanced the wealth effect of Pudong Development Bank shareholders to a certain extent.(2)From the acquisition,the stock price of Pudong Development Bank has been improved.From the perspective of Pudong Development Bank,through the financial ratio analysis,it is found that the M&A will help Pudong Development Bank to expand its intermediate business,help it adjust its income structure and improve itsprofitability from the perspective of business distribution.However,this transaction has not helped Pudong Development Bank to enhance its growth capacity and risk prevention and control capabilities.(3)From the perspective of the acquired Shanghai Trust,after a short period of integration,it has produced a positive merger and acquisition effect,and has improved its profitability.The growth ability,the risk prevention and control ability have been improved to some extent,and the influence of Shanghai Trust in China's trust industry has increased rapidly,but the Shanghai Trust is so over-dependent on the Pudong Development Bank that causes its capital profit margin to be on the low side.Through the case study of the merger and acquisition of Shanghai Trust by Pudong Development Bank,this paper summarizes the enlightenment of the merger and acquisition to the sponsors of the merger and acquisition in view of the problems existing in the process of merger and acquisition and the subsequent integration.Finally,from two different angles of financial institutions and regulators,this paper summarizes the enlightenment and suggestions of the merger and acquisition to the integrated operation of financial institutions and the effective supervision of financial regulatory institutions.