Income Approach In The Evaluation Of Commercial Bank M&A Value Evaluation Research

Mergers and acquisitions is a kind of effective way to make the resources ofenterprises get optimal allocation and enhance their own competitiveness in themarket competition environment. With the development of economy, the trend of theworldwide financial integration is strengthening day by day, which directly leads tothe competitions between firms are becoming more and more intense. While forenterprise, mergers and acquisitions can help them to develop a broader marketbusiness and expand the scope of the market and the scale of the company. Based onthe intense competition between industry and the needs of the enterprise itself,enterprise will inevitably choose this way to maintain its sustainable development. Inthe process of enterprise, can be scientific, accurate assessment of the target enterprisevalue is very important, is the key link of impact assessment results.This paper firstly summarizes the current assessment of the industry for severalmethods to evaluate the value of the enterprise merger and acquisition, on the basis ofprevious studies summarized the advantages and disadvantages of each method,further that the income method is the best party assessment of commercial bank M&a value method. Then this paper introduces the basic theory of income approach fromthree aspects, which are theoretical basis, evaluation ideas and assumptions. After thatthis paper studies to optimize the traditional income approach model in the process ofevaluating the value of commercial bank M&A. On one hand this paper introduces thetraditional income approach model; on the other hand shows the limitations of thetraditional income approach model. Thirdly, this paper puts forward a method tomodify the income approach model from two aspects, respectively. They are thesegmented income discount model and the parameter determination method of capitaland asset pricing model. Finally, this paper chooses the case of Hengda Estatepurchasing Huaxia Bank as the study object and respectively uses the traditional profitmodel and the adjusted one to get the assessment results. By the comparison of thesetwo assessment results, we can get the conclusion that the revised income lawevaluation model is a more accurate assessment method for evaluating the M&A of commercial Banks.This paper hopes that through this research and discovery, can promote thedevelopment of evaluation industry M&a field value in the study of commercialbank. And help the commercial banks enter into a more market-oriented andnormalized stage for merger and acquisitions. This paper is based on the predecessor’sresearch results and experience. Hope it can provide some help and reference valuefor the practice of future evaluation of commercial bank mergers and acquisitions tosome extent.