A Study On Chinese Commercial Banks' M&A Efficiency

A climax of global M&A in banking has occurred since 1990's. Through M&A, foreign banks has expanded scale and occupied the markets. From other countries' theories and practices we can find that M&A has played an important role in international super banks. Economics of scales and synergic effects are the charm of M&A. And finally leading to the improvement of efficiency is the key to M&A.According to WTO, China opens its financial market to the foreign banks in December, 2006. Facing to the drastic competition increasingly, how to improve own competitive power and efficiency to face the challenge, is serious and hot to Chinese commercial banks. Meanwhile, the stock holding reform of Chinese commercial banks has made effects bit by bit. The conditions of M&A are mature. So it is necessary to consider of M&A for Chinese commercial banks to improve efficiency and push marketing and internationalization in future development.Combining theory with practice, this paper studies on Chinese commercial banks' M&A efficiency. First, define some concepts of commercial banks' M&A efficiency. Then analyze the external and internal motivations about Chinese banking industry's M&A. And describe the current status and characters of Chinese commercial banks' M&A. Because this paper cites the data of Hong Kong banking industry's M&A, then introduce simply the conditions of Hong Kong banking industry. Afterwards introduce data envelopment analysis(DEA) and choose three input and output variables. And then through financial ratio analysis and DEA to research into Hong Kong banking industry's M&A efficiency. There are some conclusions. All samples' scale efficiency has improved after M&A. Especially, Industrial and Commercial Bank of China, China Construction Bank and Bank of China in Hong Kong, the three of banks' efficiency has all much heightened after M&A. However, the technical efficiency of each bank is different. Finally, gave some suggestion to Chinese commercial banks' M&A in macroscopic and microcosmic points of view.