Empirical Research On Determinants Of Commercial Bank Credit Loans

Credit business is not only a traditional commercial banking business, but also the core business of commercial banks. In the foreseeable future it will still be the business of the main sources of bank profits. For the commercial banks as creditors, the borrower can always have debt repayment uncertainties, which constitutes a commercial bank's credit risk. As long as there are lending business, it will inevitably accompanied by credit risks. In order to reduce credit risks, commercial banks will focus on the inspection and detailed information of target customers during the credit decision-making process. Commercial bank credit and credit risk management has become the hot issues in both theory and practice field.Commercial bank credit risk management levels depends the quality of its credit assets. At present, the modern commercial banks have built their own credit management system, and the company credit business processes is divided into three stages: ante-credit, interim credit and post-credit stages. In each stage, commercial banks are relying on both financial and non-financial information to do credit decisions. In practical operations, financial information plays the leading role. Although financial information has quantitative features and could be easily understood, still there are limitations. Thus it was necessary to obtain non-financial information as supplement. This paper studies the relationship between financial information and bank credit policies. The research aims at finding out whether banks focus on financial information, what type of information they pay most attention to, whether the bank credit is rational and how is the implementation of the bank credit evaluation system. In the research process, the relationship between non-financial information and credit decision-making is also considered.Commercial bank loans are divided into three types: credit loan, secured loan (guarantee, mortgage and pledge), and bills discounted. Since the credit loan is granted according to the debtor's credibility without collateral or third-party guarantees. It is supposed that such loan decisions and the financial situation are most closely linked, so this research concentrates on the relationship between credit loans and financial situation of enterprises. In this paper, Chinese Shanghai and Shenzhen stock listed companies in 2004-2005 are chosen as samples for study. Financial models are established to research bank credit loans and financial situation of enterprises, using a series of typical and recently widely-accepted new indexes. Through statistical methods, the research finds out that to a certain extent, capital structure, profitability and financial operations are what banks pay attention to, but the concern for business growth and development potential is obviously insufficient. Non-financial indicators and credit loan relationship is reasonable. The conclusion is that the commercial banks credit risk recognition and the ability to choose high-quality loan targets still need to be enhanced. In addition, this paper also discussed credit loan features of several representative industries. For the problems reflected in the empirical research, the reasons for them are argued and solutions are provided.This research on commercial bank credit loan not only benefits for commercial bank credit system, but also provides useful references for fund-lacking enterprises and the development of the credit market. It has real value and is of strategic significance.