Case Study On Risk Control Of China Minsheng Bank’s Merger And Acquisition Of United Commercial Bank

The Central Economic Work Conference held in December 2018 stressed that China will continue to strengthen the promotion of all-round reform and opening up in the next few years and relax market access.It can be predicted that the fierce competition in the domestic financial field will be further intensified.At the same time,the operating mode of domestic financial institutions will gradually shift to mixed operation.Under the internal and external pressure,it is the only way for Chinese commercial banks to actively explore overseas markets.From the national level,the "the belt and road initiative" strategy continues to advance,creating the best conditions in history for our commercial banks to actively seek the road of "going out".Therefore,an in-depth analysis of Minsheng Bank’s overseas Mergers and acquisitions case will undoubtedly have important practical significance in providing countermeasures and suggestions for small and medium-sized commercial banks to expand their overseas Mergers and acquisitions and business markets.By combining case analysis and event study,this paper analyzes the typical overseas merger and acquisition case of Minsheng Bank in many aspects,in order to provide operational policy suggestions for Chinese commercial banks to carry out risk control for overseas mergers and acquisitions.It also enriches the related theoretical system of overseas mergers and acquisitions of banks,mainly including the following research contents: First,from the situation faced by the domestic banking industry and the international environment,we discuss the motives of cross-border mergers and acquisitions,the risks of mergers and acquisitions,and how to carry out risk control;Secondly,the thesis defines the M & A in theory and discusses the development of overseas M & A theory.Thirdly,it summarizes and combs the development course,necessities and characteristics of overseas mergers and acquisitions in Chinese banking industry.Fourth,using the event research method to evaluate the performance of Minsheng Bank’s overseas mergers and acquisitions,and to study the risk points and the reasons for failure in the process of mergers and acquisitions;Fifth,the corresponding risk control strategy is put forward in view of the risk points in overseas banking mergers and acquisitions.The main conclusions of this paper are as follows: First,overseas M&A s are an important way for Chinese commercial banks to maintain their core competitiveness in the face of increasingly fierce and complex internal and external market environments.Second,the expansion demand of Minsheng Bank,the external capital injection demand of United Bank,and the increasingly complex competition environment at home and abroad have all promoted this overseas merger and acquisition.However,after using the incident study method to evaluate the performance of this overseas merger and acquisition,it was found that The merger and acquisition of United Bank of America did not achieve the purpose of expanding the market of Minsheng Bank,but caused negative spillover;Third,there are a series of risk points in the overseas M&A s of Minsheng Bank.The macro level includes political risk,legal risk and economic risk,and the micro level includes strategic risk,operational risk,moral risk and integrated risk.Risk control should be carried out in the process of merger and acquisition and its follow-up.In view of the problems existing in the overseas mergers and acquisitions of Minsheng bank,this paper puts forward countermeasures and suggestions from two levels: the government level,proposes to perfect the system and mechanism of the overseas mergers and acquisitions of small and medium-sized commercial banks,and strengthens the special policy support;At the commercial bank level,it is proposed to choose a variety of payment methods in mergers and acquisitions,rationally select merger and acquisition regions,optimize the organizational structure of the acquired banks after the merger and acquisition success,and continuously improve the integration efficiency.The main innovation of this paper is the research object.Most of the previous studies were based on the merger and acquisition of large commercial banks.The selection of Minsheng Bank as a joint-stock bank as the research object is helpful to provide countermeasures and suggestions for the overseas mergers and acquisitions of small and medium-sized commercial banks.