Studies On Determinants Of Non-performing Loans Ratio Of Chinese Commercial Banks

In the second half of 2007, the global financial crisis originated sub-prime credit crisis in the U.S began to surface. Estate bubble led to bad loans of commercial banks to continue growing, and ultimately led to the outbreak of financial crisis. Similarly, as early as in 1997 the financial crisis of Southeast Asian was also a result of rapid expansion of non-performing assets of commercial banks. Therefore, researching the ratio of non-performing loans of the commercial banks has a great significance.Abroad scholars had already begun to study the ratio of non-performing loans of the commercial banks,and they use mathematical models to study the ratio of non-performing loans。Additionally,according to their research results,they made some suggestions to the government and the banks. The factors they consider are not only the macroeconomic aspects, the microeconomic factors, including bank specific factors. Domestic scholars started to study the ratio of non-performing loans later than abroad scholars. And due to various reasons, the study of non-performing loan ratio was focused on qualitative analysis, lacking of quantitative analysis. According to foreign research results we will try to use mathematical models to analyze non-performing loan ratio of commercial banks quantitatively.Given the sustaining growth of economy of our country and bank loans, how to ensure the "double down" of the ratio of non-performing loans? In the Chapter III of this article, we use panel data model to analyze the impact variables of non-performing loan ratio of commercial banks. We consider the GDP growth, inflation, bank size, net interest margin, deposit ratio, capital adequacy ratio and NPL coverage. In the Chapter 4 of this article, we use principal component analysis model to analyze the impact variables of non-performing loan ratio of commercial banks and based on the plot of the principal component values to analyze the impact of banks by the degree of difference between the principal component values. We found that the impact of these factors on the rate of non-performing loans of commercial banks is different from European and American developed countries,. It is mainly due to the special conditions of China. Based on Chapter III and IV, Chapter V made some constructive comments.