The Analysis On Financial Effects Of Merger And Acquisition In Domestic Banks

Since 1990s, there has been a wave after wave of Merger and Acquisition in global financial industry, which expands and enlarges from time to time. Although Merger and Acquisition wave in financial industry especially bank industry is later than non-financial industry, it has developed more drastically and is up to date. By contrast, because of the history and special state of our country, the start of our bank industry is late and relative Merger and Acquisition practice and theory is still raw. So it's very necessary to develop financial theoretical study of company.Through selecting adequate sample and date, this paper applies relatively mature market analysis, DEA method and accounting ratio to do the empirical analysis of financial effects in reflection of capital market, input-output effect and effect of accounting targets, then accomplishes the research's task.The content and structure of this paper is divided to five chapters. The first chapter is introduction to relate the paper background and bring forwards research problems and senses. The second chapter is the review of theories and literature, which relates the academic situation while arguing theoretical foundation of this research. The third chapter studies research methods and designation, describing sample, data and research mind. The forth chapter is arrangement of documents, empirical analysis and discussion. With the help of realities, this chapter explores and does some innovation. For the limitation of the number of Merger and Acquisition practice in our bank industry, this paper makes bank of China limited, industrial bank and bank of Nanjing as the delegates of State-owed bank, national shareholding bank and local bank, linked with other five banks which form the total sample to do the research. First, this paper make use of event study to analyze the reflection of the bank Merger and Acquisition in capital market, then use DEA method to analyze the input-output effect of the bank Merger and Acquisition, and make something inefficient better. In the end, this paper use accounting ratio to analyze the three main banks and another subsidiary one in the whole and four fields: integral target effect, profitability, capital structure, operational efficiency and growth, then get the effect of accounting targets of Merger and Acquisition. The fifth chapter is conclusion and suggestion. Research illustrates capital market is sensitive to Merger and Acquisition of bank industry in the short run (three days to ten), but not significant in the long from the limited samples. The input-output effect of state-owned bank is worse than local bank, while the national shareholding bank is best. The effect of accounting targets is commonly positive effect in the short run, but not significant in the long run and there are still some obvious differences among each other. Meanwhile there are some advice for the merger and acquisition in bank industry.The innovation for this paper is applying event study, DEA method and accounting targets method to analyze the financial effect out of the view of the integral and partial fields, in the short run and in the long on the basic of small samples. Then there is the conclusion and advice put forward.