Empirical Study On Transition Efficiency Of Financial Intermediary Function Of Chinese Commercial Bank

When China access to WTO in the beginning of this century, commercial bank had been unprecedented challenged as a traditional financial intermediaries. These challenges have been brought by the entering of foreign banks, also by the changes of market environment. After post-WTO transition period, Chinese banking market may face a deeper and wider international competition. With the degree of financial deepening and deepening of financial liberalization, the development of Chinese non-bank financial intermediaries made structural changes of financial intermediaries, and weakened the bank's traditionally dominant position. These factors made Chinese commercial banks must engage in a transition of financial intermediary function of Chinese commercial bank to seek a new direction of development. In the context of global financial reform, the commercial banks have made carrying out non-interest business as a major business in order to maintain its position. It also represented the long-term sustainable development and the inevitable choice of seeking a new profit growth point. Non-interest banking business is focused on the performance of the operating efficiency of the bank's competitiveness and transformation conditions. So, there has been some important theoretical value and practical significance that we study the rapid development of non-interest income business and the mechanism of factors'influences.Firstly, this paper analyzed the situation of the transition of financial intermediary function, and described the non-interest business as and the focus of transformation. Secondly, we described the mechanism of different factors and conditions from both inside and outside the banking market. Finally, we made a quantitative analysis of the commercial banks'data. We established the model by using the data of 2001-2009 in the China Financial Yearbook, China Statistical Yearbook and the bank annual report, and selected the four state-own banks and ten joint-own banks as the research objects. We used the application rate of non-interest income to measure the efficiency of Chinese banks'transition of financial intermediary function, and divided the time series in two sections 2001-2006 and 2006-2009. We empirically analysis the current situation of transition of financial intermediary function and the mechanism of influencing factors, so that we can research the influence of market share, foreign banks, the bank's management efficiency and market demand to the non-interest income of commercial banks. It was found that market share, operating expense ratio and the total retail sales of social consumer goods significantly effect the business of commercial banks'non-interest income, and the operating expenses ratio's impact was the most one. This shows that the increase of our commercial banks'non-interest income was mainly rely on labor-intensive investment. High operating costs will offset a large increase in the value of non-interest income, and non-interest business profitability improved slowly. Penetration of foreign banks also had positive effects on yield of non-interest business, but there was non-significant correlation in 2001-2006 and changed to significant in 2006-2009. This shows that foreign banks in China has began to form a more substantial impact after our government freeing the limit of foreign bank's RMB business, moreover the influence of other factors on Chinese commercial banks are also getting deeper.From the analysis we conclude that the transition of financial intermediary function of Chinese commercial banks has been in its infancy. And non-interest business has developed relatively slowly, still being "extensive" growth, inefficient and lack of profitability. Our Chinese commercial banks should take the opportunity of foreign banks'coming to improve learning ability, and to learn foreign bank management experience. These banks must rapid change their old ideas, and take attention to risk and cost management and control, and improve efficiency and profitability, and actively introduce advanced technology and talents to enhance Performance of commercial banks. At the same time, Our Chinese commercial banks should take the advantage of customer base, and establish a "customer-centric" business philosophy. Starting from the demand, we must make an innovation of financial products and instruments and create a new profit growth point while continuing to charge the fee business as the main business. In short, when we transit the financial intermediary function of Chinese commercial bank, we should follow the strategy of sustainable development, cut cost, and improve efficiency by the "extensive" growing to "intensive ". Our Chinese commercial banks must vigorously expand non-interest business, and enhance China's commercial banks'business performance.