The Impact Of M&A Restructuring On Risk Resilience Of Urban Commercial Banks

To manage the risk potential and risk accumulation of urban commercial banks,regulators introduced new regulatory policies in 2018,and the tightening of regulation prompted urban commercial banks to transform and upgrade.Since M&A restructuring plays an important role in helping China’s commercial banks to develop and grow,prevent and resolve major financial risks,it is a better choice for urban commercial banks to choose M&A restructuring to reduce bank risks,improve bank performance and enhance risk resistance.This paper selects two representative banks with different levels of risk as typical cases based on the city commercial banks that have had M&A restructuring events since 2018 in order to analyze the impact of M&A restructuring of city commercial banks on their risk resistance.The research methodology of this paper is to compare the overall risk resistance of two typical city commercial banks before and after M&A restructuring with the main risk indicators and operational performance indicators that affect the risk resistance using comparative analysis and financial analysis,and then to derive the comprehensive impact of M&A restructuring on the bank’s risk resistance;the main argument logic of this paper is that,after the theoretical explanation and description of the mechanism of the impact of M&A restructuring on the risk resistance of city commercial banks.The main logic of this paper is to analyze the process,motives and effects of M&A restructuring cases based on the theoretical interpretation and descriptive statistical analysis of the mechanism of M&A restructuring on the risk resistance of banks,and then explore the overall impact and differences in the effects of M&A restructuring on the risk resistance of banks with different levels of risk,and finally propose policy recommendations based on the findings.This paper concludes from a case study that,overall,M&A restructuring of urban commercial banks has a positive impact on the improvement of their anti-risk capacity.Specifically,the findings of this paper can be summarized into two aspects: mechanism of influence and effect heterogeneity.First,regarding the impact mechanism of M&A restructuring on risk resistance.It is found that,firstly,in the process of M&A and restructuring,urban commercial banks often carry out liquidation and capital injection to increase the size of bank assets and thus improve their ability to resist risks;secondly,in the process of M&A and restructuring,urban commercial banks reduce the number of legal entities of primary banks,strengthen the vertical management of banks and optimize the organizational structure to improve management efficiency,which in turn has a positive impact on reducing bank risks and enhancing bank Thirdly,by increasing the ratio of own capital to total assets,urban merchant banks can strengthen their solvency and increase the ratio of short-term overdue loans to accelerate asset turnover,thus reducing their risk exposure.Second,in terms of the heterogeneity of the effects of M&A restructuring,a comparative analysis of the economic effects at different stages after M&A restructuring and for urban commercial banks with different risk levels reveals that,first,banks go through different stages of risk-reducing and performance-improving effects after M&A restructuring occurs,indicating that The M&A restructuring has a dual effect of reducing bank risk in the short term and improving business performance in the long term.Second,for banks with lower inventory risk,the more effective M&A restructuring is in enhancing the bank’s risk resistance,i.e.,there is a marginal decreasing effect.Therefore,it is suggested that urban commercial banks should identify their own problems and choose appropriate ways to carry out M&A restructuring in order to achieve the goal of enhancing anti-risk capacity,reducing bank risk and improving bank business performance.