Research On Loan Pricing Based On Customer Profitability Analysis Of Commercial Bank In China

With the quickening up of rate marketization in China,commercial banks owns more rights in determining loan rate and meanwhile faces more risk,which requires commercial banks higher standard of management ability.Loan as the most important and traditional business in commercial banks,will influence the payoff and the competitive advantage of commercial banks in terms of its loan pricing method and strategy.Also it will influence the bank's capital and customer structure.Therefore,a reasonable price for loan is highly related to the development and survival of commercial banks.Based on the three main traditional loan pricing methods and according to the analysis of the present state and existing problems of China,this paper points out the customer profitability model is the best choice for our commercial banks,because this model considers the overall interests of customers and banks.Through the measure of revenue,costs(capital cost,operating cost,risk premium) and the target profit,the loan price can be calculated out.As to the research methods,this paper adopts comparative analysis and case analysis. Based on the combination of the theory and practice,the paper puts forward the successful experiences absorbed and the price model adopted.In this paper,the innovation lies in two aspects:on one hand,this paper analyses the present loan price model and points out the shortages of it.With the combination of traditional foreign loan pricing models,the paper indicates customer profitability model is the best choice for our commercial banks.On the other hand,as to the calculation of target profit,this paper replaces the economic capital for the regulated capital,which can improve the customer profitability analysis model to some extent.