Evaluation Of The EVA Of City Commercial Banks And Their Driving Factors

In 1991, Shenzhen Development Bank was listed in Shenzhen Stock Exchange, becoming the first of its kind listed on China's banking industry. After 2000, with the completion of joint-stock reform, Industrial and Commercial Bank of China, Bank of China, China Construction Bank were listed. And accordingly, urban commercial banks——Bank of Beijing, Bank of Nanjing, Ningbo Bank and etc, rapidly became listed banks in China, the total number of listed banks has developed into 16. Becoming listed bank is beneficial to the establishment of the external monitoring system, strengthening banks own constraints; and is beneficial to the establishment of diversified ownership structure, strengthen internal management, these will undoubtedly support the sustained and healthy development of the whole banking sector and remove institutional barriers. Recently, a number of city commercial banks has been restructured and improved their competitiveness to get a larger increase. With the gradual relaxation of supervision, many institutional investors have also started to invest in city commercial banks. Due to the special nature of commercial banking, how to evaluate the investment bank for investors has become a new problem.In this paper, we evaluates the investment value of urban commercial banks, and analysis its relevant factors, in order to find out the appropriate business performance evaluation methods, and explore the value drivers for the use of daily business analysis and selection of investment targets. Firstly, we have to find the selected performance metrics to evaluate the Commercial Bank. We use the EVA index to assess the performance of commercial banks. Then we construct regression models, choose total assets, non-interest income, the net interest spread, deposit and loan rates, capital adequacy ratio, non-performing loan ratio, the cost to income ratio, ownership structure, board size, independent directors serving capacity, executive pay incentives design etc. as variables, which may be differences in the efficiency of commercial banks operating, to explain the bank's business performance index by regression analysis. Regression results show that the net interest spread, the capital adequacy ratio, non-performing loan ratio, cost to income ratio, executive incentives, board size and other factors have a significant impact on the performance of commercial banks. Based on the result in the operating performance of listed commercial bank and to analyze the reasons for the differences, we make recommendations accordingly, in order to provide some reference approach to improve the investment performance of commercial banks.