EVA-based Research Of Performance Evaluation Of The Bank Of China

The management of commercial bank is put to a very important position as the profoundness of reform in the commercial bank industry for the time being. Only those which are able to effectively enhance the value of the bank can obtain the potential of sustainable development, as the maturing of China's commercial banks in corporate governance structure and the rapid development of capital markets, as well as the profound understanding about the issue of the scarcity of capital, maximizing the value of the banks as the ultimate goal of management has become the consensus of shareholders, managers and operators in modern commercial bank. To explore an effective performance evaluation system has become an important objective of the parties involved in the market. EVA involves the cost of the debt and the equity, and represents the true value added from the operations. EVA is one of the tools of performing measurement radical. In essence, EVA is the capital efficiency indicator, and makes up for lack of performance appraisal in the traditional performance measurement and thus is a scientific performance appraisal system.In this paper, basing on the Bank of China, starting from the origin of EVA, talking about the main elements of EVA theory, discussing the need to introduce EVA performance appraisal to commercial banks, and with existing research and practice, introduce EVA model in line with the characteristics of bank.On this basis, this article seeks to build performance appraisal system of bank of china basing on EVA, and also build EVA assessment model to the bank's head office, branches, branch, and sub-products. By analyzing the using of EVA in Chinese commercial banks 'performance evaluation, I want to make a conclusion, that it is effective to use EVA in commercial banks. Specific proposals for the development of commercial banks are put forward and then evaluate the advantages and disadvantages of EVA targets. Then some corresponding suggestions are proposed. First, banks should increase income by improving quality of asset,strengthening management of asset and exploiting operation which create value for banks. Second, banks should reduce cost of capital by emphasizing consciousness of cost of capital and optimizing capital structure; and forecasts the Prospect of EVA application in China's commercial bank industry.