A Research On M Bank’s Equity Value Evaluation

In the process of adjusting and optimizing the industrial layout of state-owned capital,the banking industry has become a key concern industry.In this process,its equity value evaluation is an important step,because a reasonable equity value evaluation result provides a reliable pricing basis for both parties to the transaction.On the one hand,it can enable acquirers to make scientific acquisition decisions,and on the other hand,it can effectively prevent the loss of state-owned assets.Unlike the equity valuation of ordinary enterprises,bank equity valuation has certain specificity and complexity,and traditional valuation methods have limitations.Founded in 2007,J Company is a local state-owned enterprise in Chengdu with government franchise,independent operation and independent accounting.M Bank is a national small and medium-sized bank established in 2000.Based on Chengdu’s strategy of building a national financial hub city in 2018,J Company is currently planning to acquire M Bank.In the process of acquisition,the equity pricing of M Bank is an unavoidable problem and difficulty.Therefore,the main purpose of this paper is to explore the appropriate bank equity evaluation method,make a reasonable value of it,and then provide reference for J company’s acquisition decision.Firstly,the paper summarizes the existing problems of bank value evaluation by combing the literature about bank value evaluation at home and abroad.Then,it analyzes the difficulties in evaluating the value of commercial banks,and introduces the traditional valuation methods and their applicability.On this basis,the FCFE two-stage model is finally selected as the value evaluation method.Finally,EVA model is selected for robustness test and analysis to compare the evaluation results of the two models.The study concluded that:(1)Under the 1)FCFE model,the value per share of Bank M is 24.62 yuan;Under the EVA model,the share value of M Bank is 32.38 yuan.It can be considered that M Bank has investment value and its future profit will grow steadily.(2)Sensitivity analysis shows that the value of M Bank is highly sensitive to the scale of loans and advances,staff expenses and cost of equity capital,and has a positive correlation with the scale of loans and advances,and a negative correlation with staff expenses and cost of equity capital.Among them,among the influences of changes within 2 percentage points,the economic benefits of issuing loans and advances are the greatest,followed by the change rate of employee expenses,and the cost of equity capital is the least.The application value of this paper is that in the process of J Company’s acquisition of M Bank,this paper provides reference for J Company’s acquisition of M Bank,and also provides relevant reference suggestions for other state-owned enterprises to participate in the bank’s equity acquisition.