Value Assessment Research Of Commercial Bank In The Case Of China Merchants Bank

Nowadays, with the world economic and financial integration, the financial system in Chinatends to internationalized. The competition between China banks and foreign-funded banks becomes moreand more fiercely. The foreign-funded banks start to control China’s market. So the capital operationactivities, such as consolidation, acquisition, restructuring are common. Value assessment plays animportant role in the capital operation activities of commercial banks. In addition, according to the effectivecapital market theory, the prices of stocks always deviate from the real value in the real financial market.Therefore, investors have to evaluate the value of the subjects you invest so as to achieve profits. So thisthesis will study the commercial bank value assessment.Which way to choose to evaluate the commercial bank value assessment and which assessmentresult is rational and effective are important to consult and perfect commercial bank value assessmentsystem. The traditional method is limited to some degree. As a result, this thesis will contribute to find arational and effective method to evaluate the commercial bank value.RIM is a classical kind of model in the western countries, which was put forward to by Preinreichin1938and later was improved by Edwards and Bell in1961. But it wasn’t known to people until it wasrepeated by Ohlson in1995, which made it known to people. RIM associates corporation equity value withfiscal variables tightly and is combined with Dividend Discounted Models. An enterprise’s share price canbe divided into two parts: one is bank discount on residual income of investment; the other one is bankdiscount on the residual income of future operation activities. So, RIM not only attracts much attention tobanks’ books, but also makes people care more about the economic benefit of shareholders. And this agreeswith commercial banks’ management principle. That is to maximizing shareholder value. RIM becomes thebest choice among so many methods because of its own advantages.This thesis mainly uses the methods of comparative analysis and case study. The thesis has fiveparts. The first part is introduction, which firstly introduce the background and meaning of the assessmentof the value of commercial banks. Secondly cited domestic and international valuation of the status quo,and finally pointed out that the framework of the ideas as well as innovative and inadequacies. Part Two is the theoretical basis of the thesis, laying the groundwork for the below expand on the classical capital valuetheory, the modern enterprise value theory, the residual income model theory. Part Three firstly analyzes thefactors of creating commercial bank value, secondly summarizes the special natures of commercial banks,finally introduces some value method in China and their impracticability, summarizes that RIM is adaptedto the commercial banks’ operation. In Part Four, paper does a case study which makes CNM Bank as anexample. It used RIM model and further demonstrated RIM valuation method is applicable.Part Five isabout the studying results and feelings and experiences.