Research On The Motivation And Performance Of Bank-trust Mergers And Acquisitions

In the context of economic globalization,China 's financial regulations have continued to open,interest rate marketization has continued to advance,and new industries such as Internet finance have risen rapidly,all of which have increased the market's demand for integrated services from financial institutions.Commercial banks have begun to transform traditional business models and seek strategic transformation of integrated operations.In recent years,commercial banks have adopted mergers and acquisitions(M&A)of insurance,funds,trusts and other companies to achieve integrated operations.Compared with other industries,the scarcity of trust licenses and the diversity of trust investments make trust companies uniquely attractive.On the one hand,the M&A of trust companies by commercial banks is conducive for commercial banks to develop intermediate business and realize diversified investment to expand profitability;on the other hand,it is beneficial for the trust company to expand its business by leveraging the rich customer resources and marketing channels of commercial banks.However,through a review of domestic and foreign literature,this article finds that the impact of M&A on the performance of both parties may not be consistent for different events,and there are very few research results on the M&A in China's banking and trust industry.Therefore,this article selects the latest case of Shanghai Trust acquired by Shanghai Pudong Development Bank(SPDB),combines theory with practice,focuses on the motivation of the M&A and the performance impact on both parties,and puts forward relevant enlightenment according to the research conclusion.First,this article elaborates the relevant concepts and theories about M&A,and sorts out the domestic and foreign literature on the motivations of mixed M&A and M&A performance,which lays the foundation for subsequent research.Second,this article selects the case of Shanghai Trust acquired by SPDB,and sorts out the M&A process.The specific situation of the transaction,the application of Split-off,and the choice of payment methods are also analyzed respectively.Third,combining theory and practice,this article analyzes the motivations of the M&A,it mainly includes two aspects:(1)From the government's perspective,the implementation of the reform of Shanghai's state-owned enterprises and the integration of state-owned high-quality financial platforms have provided policy support for this M&A transaction;(2)This M&A will help both parties to improve management efficiency,promote cooperation,and improve financial capabilities.Forth,this article empirically analyzes the short-term market reaction after the announcement of the M&A through the Event Research Method.It is found that,from the perspective of CAR,the M&A brought positive excess returns to SPDB,indicating that the M&A event was recognized by the market.However,over time,financial supervision has continued to strengthen,and the market's optimistic expectations for the transaction outlook have declined.Fifth,this article uses the Financial Ratio Analysis Method and the Principal Component Analysis Method to study the impact of the M&A events on the medium and long-term performance of SPDB and Shanghai Trust.The study finds that,for SPDB,the merger promotes the development of its intermediate business,but the improvement of SPDB's profitability,growth ability,and risk prevention and control capabilities is relatively limited;for Shanghai Trust,the entry of SPDB significantly improves Shanghai Trust's profitability,growth ability and risk prevention and control ability.Sixth,this article also conducts a case comparative analysis,and finds that SPDB does not have market competitiveness in terms of the innovative nature of its bank-trust cooperation business,and thus loses a certain amount of profitability.Finally,according to the conclusions of the study,this article puts forward some enlightenments for financial institutions and regulators on mixed M&A.