Research On Financing Products' Innovation And Return Of Commercail Banks

As a sort of financial product, financing products of commercial banks are very important investment channel to residents, and they are also the main part of the bank's business and bring great profit to bank. It has been developed for over half a century since the financing products of commercial banks came out in western countries. However, they just have less-than-10-year history in China. Although the history is short, the market is boosting with a visible speed. As the savings of our residents is growing fast and foreign exchange gained from export-import trading is increasing, financing products of commercial banks is definitely to be another kind of specialized and gatherized investment products.However, behind the flourishing commercial bank's financing product market, there have some problems. First, domestic banks trail foreign banks in customer demand analysis and product design. Second, commercial bank's financing products are developing quickly, but they are almost the same in essence, and these make the investors dazed. How do commercial banks grasp the market? How do designers innovate? How do investors choose products? All these are the problems that we need to research and resolve.The paper at the very beginning introduces the concept, history, characteristics, category and market size of commercial bank's financing products, and compares the specialties of products issued in the lately three years, so as to conclude the market trend. Then, under the theory of financial innovation, taking the commercial bank's financial products as the object, the paper concludes the innovation methods of financial products in the market. The paper also combines the products'properties and functions with investors'demands, and comes up with the method of levels innovation. In the third part, the paper, setting RMB financing products as the object, applies the econometrics method and does regression analysis with the market data, and prove the relations between expected return with other factors of products. The paper also applies the factor analysis to research how to evaluate a product's synthesized attribute, and then summaries the characteristics of outstanding products.From the research, the paper has come to the following conclusions: (1) As domestic capital market is flourishing, and trust and QDII investment modes are exerted, foreign and RMB financing products have been changed dramatically these years. Such as the investment area is broader and broader, and the calculations of return are more and more various. (2) Commercial banks did innovations both in business pattern and product's basic factors, and the innovation of structured products is mainly in the aspects of price paths and calculation methods. In order to better meet the market's demands, commercial banks should utilize its big advantages, and based on products'properties, investors'risk preference and financing demands, make products innovations on three levels: foundation, saving, and investment. (3) The paper proves that the interest rate, period, linking asset have positive relations with expected return; and that bank'credit rank has negative relation with expected return; and that principal non-guaranteed products or floating-rate return products have higher return than otherwise the same products; and that QDII has the greatest impact on the expected return. The factors that have affects on financing products can be reduced into three components:"basic characteristic factor","attached option factor","credit rank factor".