Chinese Banks Overseas M & A Risk Warning Analysis

In recent years, China’s banks have paced their strategy of "going out", China’sbanks’ overseas M&A is experiencing a significant development both in the numberof transactions and the amount of the transaction. Acquisition of Standard Bank ofSouth Africa in2008and acquisition of Standard Bank of Argentina in2012byIndustrial and Commercial Bank of China has drawn a great interest by scholars athome and abroad. More and more scholars in this field are studying China’s banks’overseas acquisitions. This article has summarized the previous research of China’sbanks’ overseas M&A, and attempt to build a risk early warning mechanism on therisks of China’s bank overseas M&A by the using BP neural network model.On the basis of comprehensive information, a clear definition of banks’overseas M&A risk, which is the possibility of not reaching the expected target or thebad effect on banks’ normal operation and management during M&A. this paper hasalso analyzed the types of the risk during China’s banks’ overseas M&A, and theimpact of these risks on China’s banks overseas M&A.After the analysis of the types, causes and characteristics of China’s banks’overseas M&A risk, the focus of this paper has moved to establish a early warningmechanism on banks’ overseas M&A risk based on BP neural network. In chapters4and5, establishment of the early warning mechanism and the working principle of theBP neural network have been introduced. empirical test has shown that the earlywarning mechanism based on BP neural network is capable of predicting risks duringbanks’ overseas M&A.