Research On Influencing Factors Of Commercial Banks' Credit Card Profitability

China's commercial banks' credit card business has been developed since 2003.Most banks are still at a loss.Compare with the profitability oversea,the rates of return on credit card business assets(ROA)is up more than 5%,far higher than the bank's overall assets yield levels of about 1%.The banks' credit card business is high profit oversea.Why is credit card business poor profitability in China?It is an urgent need for China's commercial banks to solve the profitability of the credit card business.Most scholars are mainly focus on the credit card business model,revenue structure and so on.They have not researched on the customers who are the credit card profit source,and have not researched on the external environment combined with the credit card profit formation process.Therefore,we research the following questions.How does the customer characteristics affect on the credit card profitability based on the profit source of customers?How does the credit card profitability change with the external environment,for example the external economic environment,regional difference,market structure,resident consumpsion,population structure and so on?How is the credit cards profitability created and how can commercial banks take effective measures to adjust the profit changing trends?This is divided into seven chapters,the first chapter is introduction;the second chapter is the relevant studies' review;the third chapter is the research of constomers' characteristics influencing on the credit card profitability;the fourth chapter is the structural equation research on the effection of customer characteristics to the credit card profitability.The article build the structure equition model of the customer's demographics and consuming behaviors' effection on the credit card prodits and calculate the effections;the fifth chapter is researching on the external environment impact on the credit card profits.On the basis of international comparisions on the earnings gap,the article build the external environment's effection internet on the credit card profits,for example macroeconomic environment,regional differences,market structure,customer consuming,population structure and so on.The article found the external environment effection rule on the credit card profits;the sixth chapter is the foundation of the credit card profitability binary system dynamic model.The article built the credit card binary system dynamic model,based on the customer characteristics and external environment effection on the credit card profitability,simulated credit card profit creating process and scenario analysis profit changing trend under different management strategies;the seventh chapter is the conclusion and prospect.The main results of this study are as follows:(1)We build a structural equition model of customer demographics and consuming characteristics impact on the credit card profits.We choose commercial banks9 103,463 credit card customer accounts and their transaction informations in the last year as samples.The study veirified the customers' demographics and behavioral characteristics' direct impact on the credit card profits,and the demographics indirect impact on the credit card profits by consuming behavior characteristics.The study calculated the specific customers'characteristic variabilities' impaction on the credit card profits.(2)We build a network system analyzing on the impaction of economic development,regional differences,market structure,customer consuming and population structure on the credit card profits.We find that China's credit card market is like a monopolistic competing market whose marginal cost is greater than marginal revenue in the short-term oversupply phase.There is a long-term positive relation among credit card loans,new credit amount and the economic developing leves.Regional GDP is not consistent with the credit card customers' average profits.We draw the credit card profitability reginal map.The relationship among resident income,urban-rural gap,net exports,investment,government spending,raising pressure and resident consuming,credit card consuming has been verified.(3)We build a credit card profit mechanism system dynamics model.Taking into account the external environment factors and internal process factors,we build 28 system equations and the relationship of those factors.This model supply a efficient researching tool on the complex factors in the credit card business.We find that there are two time turning points:one is a increasing point in 2009,with a repid increase in credit card business earnings and operating indicators;another is a decreasing point in 2019,which is the big challenge for the commercial banks taking effective measures smoothing through the recession.This study supplies a new way for customer mining in consumer finance and supplies a new way for commercial banks' profitability research.It has a strong theory value in promoting the development of consumer finance theory and making up the system dynamics in the field of commercial bank profits.I has a strong theoretical guidance and decision-making reference value for the commercial banks knowing the law of the credit card profitability and making a proper policy,under new economic normality in China.