The Research On The Competitiveness Of China's Commercial Banks Based On The Factor Analysis

With the development of the market economy, the wave of financial integration and liberalization is sweeping the world. According to the rules of WTO and the basic promises of China when she entered the organization, our external financial business will be entirely opening-up in December 2006, as a result, a large number of foreign banks entered China, and started an all-round competition with Chinese-funded banks. The domestic commercial banks began a new era of competition, so if they want to be invincible in the fierce competition, building and enhancing the competitiveness of China's commercial banks become an urgent task.In order to improve the competitiveness of commercial banks quickly and effectively, the first thing is making a correct evaluation and a clear understanding of the competitiveness status quo, so it's possible to improve the deficiencies targeted and increase the overall competitiveness starting from the overall situation. However, the existing approaches and system of the competitive appraisal is artificial or not all-around, how to appraise the banks' competitiveness scientifically is a big problem which demands prompt solution. The research of this paper is launched at this point. The content of the first chapter includes putting forward the research background, raising the questions, also proposing the meaning of this study, the idea of the research and the framework of the paper. In the second chapter, the analysis of current situation and result of the study both at home and abroad are given, combining with the actual situation in China, the lessons and deficiencies are all listed as well as. In the chapter three, first of all, proposes the definition of competitiveness of commercial banks and the principles for building index system, on the basis, fixes the index system and mathematical model, also briefly introduces basic steps and theory of the research methods. The fourth chapter is the empirical study part. Firstly, combination of the actual situation, identifies research subjects; secondly, starts empirical study on the 11 commercial banks, makes the primary indicators simplified by analysis the relevance and importance of the primary indicators through the measurement methods; lastly, establishes the factor scores and the competitiveness ranking of commercial banks. Finally, the effective proposals to increase the competitiveness of domestic commercial banks are given in the fifth chapter.The main characteristic and innovation of this paper lie in three following aspects: 1 .Raises the knowledge of competitiveness on the theoretical basis of collating and summarizing literatures of commercial banks competitiveness, builds the theoretical framework of competitiveness by integrating the theory knowledge of accounting, econometrics and finance; 2.Builds an evaluation index system reflecting safety, profitability, liquidity, innovation, the basis of assets and business environment six factors, make up the defect in the existing research that lack of comprehensive; 3.The factor analysis that is one of multivariate statistical analysis method is adopted to describe most of the original data information by a small number of factors and find the main factors affecting the competitiveness of commercial banks, and to solve the problems of the existing research which causes randomness and subjectivity, simultaneously, makes up the defect of factors lack of ambiguous meaning by the implementation of the load matrix orthogonal varimax rotation, thus enhances the feasibility and scientific of the evaluation.