A Study On Differentiation Loan Pricing Of Commercial Banks In China

As market-based interest rate reform gradually promoted,commercial banks in china face fiercer competition. It is of great theoretical and pratical significance to research loan pricing.This paper tried to study loan pricing of commercial banks on the basis of the idea that the analysis and measurement of the factors affecting loan pricing is the key to the study of loan pricing.This paper begins with the basic theory of loan pricing of commercial banks and introduces four overseas models of loan pricing .Four main factors are found through above analaysis and they are operational costs,costs of funds,competition and customer relation.It is also found that different model focuses on different factor.In light of the current situation and existing problems of the loan pricing of domestic commercial banks, the paper puts forward the idea of differentiation loan pricing.Loan pricing is a procession and the differetiation lies in the whole procession of loan pricing, not the difference of lending rates.The idea of differentiating the loan pricing is from the different advantages that owned by different commercial bank and different market positioning that every bank should have according to its unique advantage.This paper researches four main differences in loan pricing:difference of credit risk,contribution difference,industry difference and regional difference.There are two steps in the procession of loan pricing under the method of differentiation loan pricing.In the first step,the inner basic rate of loan is made on the basis RAROC model.In the second step,the inner basic rate is adjusted accord to the other three differences.