| Compared with other forms of organization introduced from abroad in the 19th century,modern banking has taken root in China a little bit late.However,in the forty years since the founding of the first Chinese-funded bank,China Commercial Bank,the new-style banking industry has grown rapidly.From being attached to the banks and foreign banks and struggling for survival and development in the cracks to being the best in China’s financial field,and playing an important role in China’s modernization.The difference from many outstanding researches is that this article advances the research on new banks from the industry level to the company level,and focuses on quantitative analysis while using historical data to demonstrate.For the first time,I have comprehensively collected and compiled 1463 annual business reports involving244 banks.These reports span 40 years(1897-1937),accounting for 83.2% of the total business reports at that time.With the help of data envelopment analysis(DEA)and ratio analysis,the performance measurement indicators of the four dimensions of business,profit,cost and leverage are constructed.Based on this,the operating conditions of Chinese banks are analyzed.Different roles played by the government and market players are examined during the development of Chinese banks.From the analysis of the overall development trend of the banking industry,accompanied by growth phenomena such as the increase in the number of banking institutions and the expansion of asset scale,modern banks have continued their efforts to develop markets,control risks,and cultivate talents.The ability to expand business has gradually improved,but at the same time,it is subject to factors such as backward financial infrastructure,narrow financial markets,business convergence,and increased competition caused by the concentration of banks’ spatial distribution.As a result,the overall profitability of banks has continued to decline,and the return on net assets has decreased.In addition,compared with the large fluctuations in various indicators during the period of the Beiyang Government,the operating conditions of the banks during the period of the Nanjing National Government have become more gradual.From the perspective of debt risk,although the overall leverage ratio of the banking industry has shown a slow upward trend,the absolute level is not high(20-30%).The main risks come from run-ups caused by political turmoil,less lending outlets,Government debt defaults and other factors.The state banks of modern China,benefited from the use of large-scale financial funds and the right to issue banknotes,solved the problem of the shortage of funds for start-up banks,and their businesses were able to expand rapidly,but at the same time,they also needed to provide financial support to the government with a current fiscal deficit.Continuous advances or overdrafts lead to problems such as bad debts and insufficient liquidity.Therefore,the National Bank presents a situation of high business efficiency but low profit margins.Moreover,the profit of the National Bank mainly comes from the operation of its commercial banking business,while the function of its central bank has not been exerted to a great extent.After a comparative analysis of the central Chartered Bank,provincial and municipal banks and private banks from 1928 to 1937,it is found that in the non concession areas with poor institutional environment,provincial and municipal banks have more advantages than private banks;In concession cities with better institutional environment,market competition is more sufficient,and provincial and municipal banks no longer have advantages over private banks.In different institutional environments,different ownership banks have different ways to achieve their business performance.Provincial and municipal banks obtain higher operating profits through higher interest rate difference in the environment of local monopoly by virtue of franchise in inland areas;The private banks in the concession cities achieved higher profits through business expansion and cost control under the better environment of private property protection and market competition.Overall,the provincial and municipal banks during the period of Nanjing national government showed relatively good profit efficiency.An analysis of 23 important private banks found that public bonds issued by the central government provide a high-return and long-term investment financial product,which facilitates private banks to make short-term corporate loans(usually three months,six months,or one year)and Better asset allocation among long-term government bonds,and an appropriate risk premium,make banks willing to invest in projects such as government bonds,government borrowing and railway construction.Benefiting from the higher risk-return obtained from these investment products,banks can vigorously promote savings deposits with higher unit costs to absorb social scattered funds and compete with other financial institutions for scarce large deposits in the form of high interest rates,thus,Under the dual competition of foreign banks with strong strength and high reputation and local banks with great advantages in the field of domestic trade,the company has gradually improved its credit and expanded its business scale.At the same time,private banks have controlled the allocation of high-risk and less liquid public bond products(generally no more than 20% of total assets),enabling them to gradually improve business efficiency and high profit efficiency during the politically turbulent period of the Republic of China.on the operating performance of the National Bank.For the first time,this paper estimates and evaluates the operating performance of Chinese banks in the period of the Republic of China.A more comprehensive and microcosmic quantitative analysis of the bank’s operating performance will help us to establish a holistic and empirical understanding of the development of the banking industry at that time,and also help us to have a deeper understanding of the financial development in the initial stage of industrialization and in the state of economic backwardness,as well as expand our understanding of how the government acts in different economic environments affect the cognition of bank development. |
PDF Full Text Request