Analysis On The Competitiveness Of Chinese Commercial Banks

With the complex and changing environment in the world economy and the uncertain situation of China's economic trends, China's commercial banks are facing severe challenges. On the one hand, under the environment of international financial crisis and economic downturn, credit risk is more severe, increasing the uncertainty of the source of profits. On the other hand, with the full liberalization of China's banking sector on the December 11, 2006, banking sector competition further intensified. How to improve the competitiveness of china commercial banks so that they get sound and rapid development in the international and domestic market, is worth studying.Competitiveness of Commercial Bank is based on the balance of liquidity, safety, and profitability, the commercial banks has formed the capacity of sustainable development by using the internal and external resources plenty, exploring the potential persistently. Among this, Resource factor, capacity factor and environmental factor are three essential elements in the formation of the competitiveness of commercial banks. This paper has built commercial bank's competitiveness evaluation system from eight aspects, including liquidity, capital adequacy, asset quality, profitability, growth potential, corporate governance, innovation, and management. Then, it has done empirical analysis of the relevant data of the 11 listed banks by using factor analysis. Four key factors are extracted according to the principle that the eigenvalue is bigger than 1: the factor indicating the ability of capital adequacy and corporate governance,the factor indicating the ability of innovation and management,asset quality and development potential factor,profitability factor. It is concluded that after analysizing the factors deeply: good corporate governance can help banks replenish their capital, the developmental potential is conducive to enhance the quality of bank assets. It is also found that: some banks have the problem of uneven development, which is affecting the overall competitiveness; The commercial banks is facing the problems: corporate governance is not scientific, lack of innovation, especially in the existence of sources of income over-reliance on deposit and lending poor single profit patterns. Commercial banks should be subject to a balanced development, target to address the outstanding problems existing in the development and continuously build its overall strength to enhance the competitiveness.The main feature of this paper is the following three aspects: 1,Competitiveness of commercial bank is concluded after studying deeply the existed research results about the bank competitiveness; 2,It has constructed a scientific evaluation system on the competitiveness of commercial bank ,which is multi angle,comprehensive and level clear;3,using the scientific method --- factor analysis ,It has conducted an empirical study on the competitiveness of chinese commercial banks. The conclusions are objectively reasonable and good for the chinese commercial banks to further reform and develop.