The Factor Analysis Of China's Commercial Bank Performance

A steady bank system is important cornerstones which can help modern economies maintain stability and healthy development. In order to achieve this goal, China's banking industry has experienced a long-term reform process. To review the reform process of China's banking industry in the past 20 years; we can find that the reforms have followed such a path: first reforming the market structure, and then the property right of state-owned enterprises. But the changes of market competition structure in the banking industry and the following reform of joint-stock system have not brought an anticipated improvement of performance actually. The purpose of this paper is to research some vital reasons which have led to the low performance of the banking industry in China.Firstly, it is the theories of commercial bank performance evaluation. There are so many ways to evaluate a bank's performance; the purpose of this chart is to find a direct way which suits the situation of China banking. Then it is the Industrial Organization Theory, which holds that a company's performance is determined by market conduct, and market conduct is determined by market structure. The determination theory of commercial banks' performance is based on the Industrial Organization Theory, consisted of five conjectures, analyzing the elements that influence the bank performance. The next chart combined the theory above to analyze the detailed reasons influencing China's bank performance, based on three aspects: macro level, middle level and micro level. In the last chart, it picks about 13 representative commercial banks in China, using the variables above and the econometric model to find the relation among those variables, and try to give some proposals.Based on the positive and normal research, the conclusions are: competition-monopoly is the main character of the China banking industry. And in the market, the banks' performance is mainly determined by the micro-factors and macro-factors. Moreover, the middle-level-factors' effects is relatively smaller. So, the banks must focus most attention of them on controlling the internal factors. According to the characteristics of these factors, during the deepening of property rights reforms and perfection of corporate governance, the author considers that there are different emphases indifferent times, and advices take the mixture reforms of short-term, medium-term and long-term in a certain time and area to improve the commercial banks 'performance, which made the reform more rational during the deepening of property rights reforms and perfection of corporate governance.