Discussion On Valuation Methods Of Listed Commercial Banks

Finance is the core of modern economy and it has an important influence on the national economy.The close relationship between industry and finance and the combination of industry and finance have been throughout the development history of China's financial industry in promoting the growth of China's banking industry.According to the list of "top 1000 global Banks in 2018" published by the British magazine "Banker" in 2018,China's domestic Banks occupy 12 of the top 50,among which the four state-owned Banks of China construction bank,industrial and rural bank of China and China construction bank rank the first four.In addition to the big four state-owned commercial Banks,other joint-stock Banks and urban commercial Banks also achieved excellent results in the banker magazine's ranking.China,s commercial Banks have become a competitive force that cannot be ignored in the international market.However,with the continuous promotion of interest rate liberalization,the implementation of new regulatory regulations and the development of other financial industries and Internet finance,China's banking industry is facing unprecedented challenges.Although there is a relatively mature theoretical system for the value assessment of enterprises at home and abroad,there is no systematic theoretical system for the value assessment of commercial Banks.Banks are very special businesses that operate mainly in currencies and third-party services,so it is more challenging to value the bank as a whole than it is to value ordinary companies.At the same time,in order to maintain strong market competitiveness,Chinese comnercial Banks must carry out effective value managenent.This paper adopts three methods:literature review,model construction and case analysis to discuss various valuation models of commercial Banks.Traditional valuation models can be roughly divided into three categories:absolute valuation model,relative valuation model and asset-based valuation model.The three methods have their own characteristics,among which the asset-based method is net asset oriented.Considering that intangible assets account for a very important proportion in commercial Banks,the evaluation results cannot reflect the real value of Banks,so this method is generally ignored in bank valuation.Absolute valuation model is the most widely used method to measure shareholder value,and its valuation concept has been recognized by most scholars in the industry.Its advantage is that it can reflect the intrinsic value of Banks,which is related to both the market and internal performance.The result of its valuation is both at the bank level and the operational level,and this method is the main method of bank valuation.The relative valuation method is favored by many evaluators and scholars for its simplicity and clarity,which plays an auxiliary role in the valuation of commercial Banks.The valuation of commercial Banks is different from that of companies in other industries,In the process of selecting value assessment methods,researchers must have an in-depth understanding of the business characteristics of commercial Banks,carefully analyze various factors affecting the intrinsic value of Banks,and finally evaluate commercial Banks by combining their particularities in business operation,capital structure,risk and other aspects.This paper takes China Minsheng Bank as an example to evaluate its value by using the established valuation model,and analyzes the applicability of various valuation methods in the actual valuation application through examples.In this paper,the EVA valuation method is selected to evaluate CMBC.In addition,the modified p/e ratio method is adopted to supplement the value evaluation research of CMBC,highlighting the simplicity and simplicity of the relative valuation method.Through this study,it can be concluded that the 'evaluation of the overall value of a bank is often not completed by one method,and it is necessary for researchers to adopt multiple methods from multiple perspectives to obtain a more reasonable value.EVA valuation method is mainly recommended in this paper to evaluate the value of commercial Banks.lt reduces the impact of accounting distortions and helps Banks focuson sustainability,assessing their overall value while understanding their profitability.