Performance Analysis Of ICBC's Merger And Acquisition Of Standard Bank

In recent years,under the impetus of accelerating the implementation of the “going out”strategy,the scale of“going out” of domestic entities has been continuously expanded and strengthened.At the same time,combined with the country's “One Belt,One Road” vision,domestic enterprises are increasingly active in foreign economic activities,and the scope of cross-border activities is relatively broad.These will lead to a series of various directions such as information and operational support,risk analysis,and financing support.The need for cross-border financial services.In this context,many commercial banks actively seek overseas markets for cross-border mergers and acquisitions.As the head of the four major banks,ICBC has been actively exploring the path of cross-border.Under the relevant theory of cross-border M&A among commercial banks,which is the horizontal merger and acquisition of enterprises,this paper explores the factors affecting inter-bank cross-border M&A,such as culture,M&A type and payment method.On this basis,ICBC is selected to acquire South African Standard Bank.This classic case is a case study.This is the highest transaction amount in the history of ICBC's overseas mergers and acquisitions.It is also the first attempt by Chinese commercial banks to enter the African market.The article uses case analysis to review the motivations,processes,and outcomes of the merger.ICBC launched M&A activities for South Africa's Standard Bank,the largest commercial bank in Africa,for the development of South Africa's business platform,optimization of existing capital allocation methods and the need for innovative business models.The acquisition took 45 days,and after 10 years of mergers and acquisitions,ICBC In conjunction with Standard Bank,it provided financing support for 35 large-scale projects in 13 countries,which drove nearly US$20 billion in Chinese investment and made great contributions to China-Africa economic and trade exchanges and development.In the choice of empirical methods,this paper combines a variety of analytical methods: DEA qualitative analysis and quantitative analysis of the financial data of ICBC's overseas branches and South African Standard Bank..Firstly,the event research method is used to study the changes in the stock prices of ICBC in the capital market after the announcement of the M&A news.The empirical results show that the short-term shareholder response shows that the cumulative abnormal return rate and the average excess return rate are significantly greater than zero during the window period.Among them,the cumulative abnormal rate of return showed a significant upward trend,and the average abnormal rate of return also fluctuated above zero.Then,the T test was continued on both of them,and they all passed the test significantly,which can be determined that the merger and acquisition activities brought to ICBC.The positive shareholder effect is to increase the shareholders' equity;secondly,the equity income model is used to select the financial data of the Standard Bank of South Africa and the offshore division of the ICBC that has divested the domestic business,and conduct a long-term financial benefit analysis to explore mergers and acquisitions.What is the change in the company's profitability,solvency and operational capacity? It is concluded that in the long run,the financial indicators of both banks' mergers and acquisitions have performed well,and the return on assets and the return on net assets are in mergers and acquisitions.Significant growth during and after the period,increased profitability,long bank The performance of the period was improved.Finally,the DEA model was used to test the input-output efficiency of the acquired Bank of South Africa after the merger and acquisition of the Standard Bank,and to study the impact of the occurrence of the merger on the operating efficiency of the standard bank,from the input-output effect of the acquired bank.In view of this,Standard Bank is basically in an efficient state during overseas M&A years.It is only that the M&A activity will decline in size in the same year,but it will quickly respond to the DEA,indicating that the M&A case will have a certain negative impact in the year of M&A.The profit status will be restored soon,indicating that the emergence of M&A results will take time,but the M&A business is still effective.In summary,ICBC's overseas M&A activities have played a certain role in promoting and promoting the development of ICBC and Standard Bank,which not only greatly improved the overall efficiency of standard banks,but also achieved economies of scale..Finally,this paper puts forward the following suggestions for the successful development of China's banking industry's overseas M&A business by summarizing the successful experience of ICBC's cross-border M&A and the factors affecting M&A performance.First,we must rationally choose the M&A area,that is,first in Hong Kong and Macao or Southeast Asia opened a breakthrough in mergers and acquisitions,followed by active expansion of emerging countries such as Africa and the Middle East,and finally aimed at developed countries to achieve globalization;second,the choice of mergers and acquisitions should be complementary to its own business operations,and the scale of operations is moderate;Third,flexible M&A payment methods,although the cash payment is stable,but will also reduce the bank liquidity,so the combination of cash payment and equity acquisition to reduce the business risk after mergers;the fourth is to improve the risk control before and after the merger And the integration work after the merger.