Commercial Bank Credit Rating And Empirical Analysis

Corporate credit rating is a kind of economic activity to evaluate the capability of repaying and the repaying will,show the evaluating result with simple code with relevant for the investor, supervision institution and other relative sides. Commercial bank credit rating is based on the analyzing all the risk faced by the bank, using some method to measure the probability of default and capability of repaying and using a simple code to represent for it.Commercial bank is important for the whole finance industry, and it has a huge influence on the domestic economic development. Commercial bank credit rating provides risk information and suggestions for the depositors, investors and so on. At the some time, commercial bank credit rating is helpful for the bank supervision institution to supervise and control the risk. It is a good way to keep the citizen have confidence on the banks, so the economic will develop in a save way. To the commercial bank itself, the credit rating will help it to set a good image to the public, enlarge the market and reduce the cost.Till now, the attention payed to the credit rating is not enough, especially the commercial bank credit rating and the research in this area is little. As the financial market become more and more international, the commercial bank credit rating will become more and more important. And it is essential to find a good way to evaluate the credit rating of our commercial bank.The paper analyzed the commercial bank credit rating from both quality and quantity aspects. From the quality aspect, we analyze the commercial bank credit from six areas: economic environment, industry environment, financial supervision environment, risk, management and government support. In the quantity aspect, we build a model using financial data to measure the credit rate. The article used the statistics method: the factor analysis is used to extract the communal components; then the cluster analysis is used to separate the sample banks into three kinds; on the classifying the discriminant analysis is used to attain the Fisher functions; The main purpose of this method is to supply a simple and feasible method to evaluate the bank's credit rating.As the result of the article, we got two functions to evaluate the commercial bank's credit rating. One is using the result of factor analysis, which is more accurate but complex to compute. From this method, we can get the credit score for each bank. The other one is the Fisher function. We use this method to classify the banks into several ranks.