The Application Of Economic Value Added In The Performance Evaluation Of Commercial Banks

In the current management of domestic and foreign commercial banks,value management has become the mainstream trend.Among them,economic value added is an important factor in value management and has become a brand-new indicator of internal management of commercial banks.This new indicator overcomes the shortcomings of traditional indicators.The economic value added is now widely used in foreign commercial banks and is a key indicator for bank performance evaluation.Throughout the evolution of foreign banking industry,the main criteria for evaluating bank performance have changed from asset size to capital strength and shareholder value.The theory of "economic value added" introduces a new concept of economic capital,which links science with risk and capital.It is an unparalleled advantage in explaining how the true value of the bank is created..This article elaborates the relevant theory of economic value added,analyzes the application advantages of this theory,takes Bank A as the research object,and explores the feasibility of economic value added theory in performance management of Bank A,and analyzes the results through actual cases and listed bank data.The performance evaluation system based on economic value added can improve the operating efficiency of Bank A.Finally,it gives specific suggestions on the future business operations of Bank A.Specifically,the research of this paper is mainly divided into six parts.The first part is introduction,summarizing the research background and significance of this paper,the content of the paper,research methods,innovation and deficiencies.The second part is the literature review,reviewing the research history and research results of economic value added and performance management at home and abroad.The third part elaborates the relevant theories of performance evaluation and economic value added,introduces the concept of economic capital,analyzes the role of economic capital management in banks,evaluates the advantages of performance evaluation based on economic value added in banks,and provides theory for follow-up studies.In the fourth part,it first summarizes the current evaluation system of Bank A,and analyzes the existing problems.Then based on the theory of economic value added,A bank performance evaluation system was reconstructed.The fifth part establishes the econometric model,the compares and demonstrates the reflection of EVA and the traditional index net asset return rate on the stock price of the listed banks,and concludes that EVA is better than the return rate of the net assets,then demonstrates through the actual case of Bank A that the application of the economic value-added performance assessment system in Bank A can effectively guide Bank A to increase the efficiency of capital use and create greater value.The sixth part proposes policy recommendations for the future business operations of Bank A based on the results of the foregoing analysis,including strengthening risk management,accelerating business restructuring,promoting business transformation,and improving staff incentive and restraint mechanisms.The measures proposed in this paper to improve the business operation of Bank A,such as accelerating business structure adjustment,optimizing credit structure,promoting retail transformation,and increasing income generation of intermediary business,have certain guiding significance for how other banking institutions can better improve performance evaluation..Since the internal performance appraisal information of domestic banks is a trade secret,the outside world cannot obtain it effectively,which makes the data in the text have certain limitations and one-sidedness,and needs to be further supplemented.