| Mergers and acquisitions of banks is always the hottest issue in financial field. In hundreds of years, such fad had never been cold. It is easy to find out from the ranks of international banks that most ones of the top 100 banks had the experience of enlarging their scale by way of merging other banks. Also, almost every bank with the international competitiveness grew up and became strong during the M&A (mergers and acquisitions). Especially in the late 1990s, there was a huge wave of large-scaled M&A, exceeding any waves in the past. What's more, during this M&A heat, gigantic"financial fleet"was emerged, such as Citi Group, Morgan Chase and Mizuho Financial Group, etc. Therefore, the inter-bank competition came to be more and more intense while the banks'international competitiveness was increased.In such background, China joined in the WTO in December, 2001 and realized its commitment of opening-up its RMB business to the foreign banks. So China's banking industry is facing fierce competition from the alien super banks. In order to meet the challenge, Chinese banks, especially the wholly state-owned commercial banks implemented a series of measures, such as restructuring the banks'balance sheets, transforming the operational mechanisms, inviting strategic investors, listing them in the stock markets, recapitalizing them with the help of the government, etc. In the meantime, as the highly centralized planned economic system made room for the market economy, the corporate governance of the commercial banks was highly improved and the commercial banks had more power to operate the businesses on its own. China's banks are transforming their political function to a real bank, gradually synchronizing itself with the foreign banks.It is worth mentioning that in 2007, the financial crisis derived from the sub-prime crisis wiped out the whole world. In America, the top five investment banks were either bankrupt or merged. Many commercial banks accepted the recapitalization and nationalization. Hundreds of medium-sized and small banks were shut down. In Europe, the European banks also suffered the takeover,recapitalization,nationalization and M&A. Some small countries like Ice island almost face the states'bankruptcy. Under such circumstances, the foreign banks began to adjust the structure of their business and sell the none-core business at low price. Moreover, the nationalization of the banks in the west to some extent loosened the restriction of the foreign investment funds entering into their market. Therefore, the pattern of the international banks'structure is about to be rescheduled.At the same time, thanks to the safe operation and careful regulation, China's banks invested less money on the sub-prime bonds. Therefore, the direct impact from the financial crisis was quite limited. Moreover, China's fast growing economy (at the speed of 9% in 2008), solid currency reserves and the vast experience of dealing with the shock of the 1997 financial storm made it possible for China to seize this opportunity and headed out to implement the"going out"strategy. By way of mergers and acquisitions overseas, China's bank could strengthen its own competitiveness, participate in the international competition, narrow the gap to the western banks and truly come to be the international bank.In this background, this essay mainly takes research on the bank's mergers and acquisitions, and by explaining universal banking, points out that final goal of M&A is to realize the universal banking in China. This essay is to provide some reference and suggestion on the M&A act of our banking industry today.There are four parts of this essay:Chapter OneThis part mainly introduces the theoretical basis of banking M&A. Firstly, the essay gives a brief definition of banking M&A and then theoretically analyzes the M&A with five classic theories. Secondly, the essay gives a relevant definition of the universal banking, and then theoretically analyzes it with three aspects of Financial Intermediary theory.Chapter TwoThis part mainly summarizes the international banks'behavior of enlarging scale and broadening the scope of business. Firstly, this essay points out that most banks are enlarging the scale by M&A and then recalls the history of the banking M&A, summarizing some gigantic banking M&A in the US during the third M&A tide in the form of chart. By discussing the third M&A tide and the successful case of Morgan Chase, the essay analyzes the macro traits and the micro laws of the M&A. Secondly, this essay points out that most banks are broadening the scope of business by mixed financial operation, and then reviews the passage of its history. Chapter ThreeThis part mainly analyzes the possibility and necessity for China's banking industry to take measures of M&A as well as mixed financial operation. Firstly, the essay analyzes the merits and flaws of M&A. While this essay affirms the M&A's merits of increasing the efficiency of resource allocation, enlarging the bank's capital scale, complementing commercial and investment businesses as well as improving the market mechanism of exit, it also points out its flaws of sabotaging the market fairness, increasing the supervisory difficulties, leading to various risks and threatening the social stability. Afterwards, after taking into account China's national conditions, the essay concludes that it is necessary for China to carry out M&A. Secondly, from three perspectives of helping bank gain more profit, realizing the win-win among the banking, securities and insurance industries, the essay points out that carrying out mixed financial operation conforms to the international tide based on the said perspectives.Chapter FourThis part mainly suggests the measures and procedures for China to take in order to raise its international competitiveness as well as develop the scale and business of Chinese banks. Firstly, the essay analyzes the realities of China's banking industry, affirms the achievements that Chinese banks had after banking reforms and points out the current issues, meaning to points out that it is urgent to raise competitiveness of China's banking industry. Secondly, the essay designs a series of steps in carrying out M&A for China and tries to realize mixed financial operation in M&A. Moreover, the choices of M&A overseas'location, time and objectives are systematically analyzed. Especially, it is suggested that Chinese banks should seize the opportunity of the current financial crisis, choose the best time and the best location to carry out M&A overseas strategy.ConclusionThis part summarizes and concludes the whole essay and looks ahead the future of Chinese banks. |
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