The Research On The Effect Factors Of Financial Products Yield Of Commercial Bank Of China

With the development of China's banking financial market, more and more investors use bank financial products as important investment products.The development of banking financial business enriched the bank's business model and open up a new path for profitability, it also provides investors with new investment chance.How about the profit of bank financial products? What are the factors affecting its earnings?This paper conducted a theoretical exploration and empirical testing about it.In this paper, we first reviewed the literature about the development of the banking financial theory, financial operations and financial product pricing. Subsequently, in order to explain the difference influence about various factors on the financial products income,we classified the financial products from these points as follows:the way customers get their earning; the area of the products investment;product structure and product currency.Next we focus on the theoretical analysis about the benefits affecting factors of financial products:the first factors was the impact of based return on assets, we discussed the profit structure of single-type financial products and structured financial products, and analysis the basis impact path for capital gains on financial management to product return;the second element is risk factors, risk is the basis for pricing of financial assets,we have analyzed the credit risk, interest rate risk, exchange rate risk, equity risk, as well as other possible risk factors in the analysis process separately, we also discussed the main risk factors in different types of financial products;the third factor is the mobility, there are three main factors restricted the mobility of financial products:time limits, the rights of early termination and impawn, which implies us focus on analysis the impact of the rights of early termination.The use of arbitrage theory analysis the relationship among redemption interest rate, return of expected and re-invests return.We discuss the option value of the rights of early termination from the theory and its impact to the expected revenue for financial products;next, we also analyzed the impact of bank's management capabilities and benefits of homogeneous products to the returns of the financial product.Bank's management capabilities include the ability of pricing to financial products, and follow-up fund management capabilities,the different types of these two abilities have significant different impact to the financial products in income, such as stronger pricing power lead to a lower the premium.For income-based financial products, the stronger of the follow-up financial management capacity have,the higher income that the revenue-based financial products will get.The impacts of homogeneous products can perspective from the substitution effect, but because a lot of homogeneous products are also the subject of financial investment products, its impact can not be effectively measured.Based on the theoretical analysis,we specifically selected the relevant data of guarantee return financial product to give an empirical test:first, according to the previous theoretical analysis we established a financial product revenue factors model,we first gave a principal component analysis to all homogeneous product revenues there may have multicollinearity. Using the three principal components extracted Several factors were, with the early termination of the rights, management time, management ability, as well as the foreign exchange risk as explanatory variables and with the return of bank financial products as a variable, the regression analysis showed that:The model assumes can through the significant test from whole. The financial products which have the right of early termination have a significant impact on earnings.Banks which have the right of early termination have positive impact to the financial product returns, investor-owned which have the right of early termination have negative impact to the financial product returns, which can prove the hypothesis that the right of early termination need to pay some option fee in the front theory analysis.Foreign exchange risk can through the significance test at 1% significance level,indicating that foreign currency financial products need risk compensation. Factors F1 and F2 which indicated homogeneous product revenue factors can pass the significant test at 1% significance level, indicating that homogeneous product also has a significant impact on financial management earnings,but the coefficient is negative, it means that homogeneous product revenue have substitution effect on the financial products.Duration at 10% confidence level through a significant test, the proceeds of its financial products influence coefficient is positive, in line with our assumptions. The ability of bank management variables through the significance test at 1% significance level, indicating the ability of bank management also have a significant impact on financial products earnings.Theoretical analysis and empirical test results provides a theoretical foundation for the financial product innovation and provide a reference for the pricing of financial products, which also provide a basis for the investors to choose.