Research On The Application Of Residual Income Method In The Value Evaluation Of Small And Medium-sized Commercial Banks

As the intermediary of capital financing,banks have very important economic functions.In recent years,the development of capital market provides a new way for medium and small commercial banks to finance.With the arrival of the "listing tide" of the city commercial banks and the agricultural commercial banks,the valuation of the small and medium-sized commercial banks becomes an important link among them.On the other hand,small and medium-sized commercial banks have the particularity of their management-money as the main business object.This makes it difficult to evaluate the value of medium and small commercial banks by traditional evaluation methods.Therefore,it is worth discussing whether we can find a value evaluation method which is both feasible and concise.This paper mainly through comparative analysis,case analysis and empirical analysis of small and medium-sized commercial banks value evaluation methods.Firstly,by comparing and analyzing the advantages and disadvantages and applicability of the traditional valuation methods,the paper determines that the residual income method is more suitable for the valuation of commercial banks.However,in the actual valuation,it is found that the residual income model is based on the valuation model of book value.However,at present,the equity value of large commercial banks in China is relatively high,and the estimated value is quite different from the market value.Therefore,it is considered that the residual income method is only suitable for the evaluation of the value of small and medium-sized commercial banks at the present stage.Secondly,through the derivation of residual income model,the relationship between residual income model and financial indicators is established by introducing DuPont analysis system.Thirdly,taking Ningbo Bank as an example,taking December 30,2016 as the base date of evaluation,the relevant parameters such as beta value,main business income and other related parameters are analyzed,forecasted and estimated.Finally,according to the analysis of the valuation process and results,some suggestions are put forward to improve the model.The conclusions are as follows: first,compared with other valuation methods,the residual income method is more suitable for the value evaluation of small and medium-sized commercial banks at this stage;second,within the allowable error range.The valuation results of residual return model can accurately reflect the market value of small and medium-sized commercial banks.We need to improve from the following aspects: pay attention to the influence of non-financial factors on the value of small and medium-sized commercial banks,further improve the capital market,further standardize the system of accounting standards,and further improve the system of accounting information disclosure.