A Study On The Operating Efficiency Of Private Banks In China

Private Banks are controlled by private capital, at the same time, market mechanism is adopted to improve the management of the bank. On June 29 th, 2013,Shang Fulin, the chairman of China Banking Regulatory Commission, said “allow to set up a bank at their own risk by private capital” in Lujiazui Forum. Then in 2014, March 11 th, Shang Fulin announced the list of 10 private enterprises which enter the first batch of private banks. The first 5 pilot private banks carry out work, their development opend the curtain.The establishment of private banks has injected new blood for the perfection of banking system in China, promoting the entire banking industry to elevate competition ability,promoting the entire system of the banking march towards marketization process.However, the development of private banking doesn’t gosmoothly, and face many problems. For example, the myth of GDP growth rapidly isn’t appear, our country economic is in weakness. Marketization of interest rate is a bigger challenge for banking competition, and weak the profitability of the banks. The formal implementation of deposit insurance system, means allowing its bankruptcy, it is will bring the concerns and distrust of the general public for the new private banks. In such environment, the development of private bankis staggering.This article adopts DEA(Data Envelopment Analysis)to evaluatetheefficiencyofprivate banks in operating,the sampleare Minsheng bank, Zheshang bank, Taizhou bank, Wenzhou bank,Zhejiang Golden Bulls Commercial bank,Zhejiang Tyrone Commercial Bank. They are similar to privatebanks. This article selects five-years of financialindicatorfrom2010 to 2014,in view of the data results of six Banks, respectivelyfromthree aspects,such.as.profit ability,capitaloperationandriskcontrolabilitytoc arryoutcomprehensiveefficiency,pure technicalefficiency and scale efficiency analysis of th e results.Fromtheresultsofthesixbanks in fiveyears,sixbanks’ profit ability is in goodcondition. Most of the technical efficiency, pure technical efficiency, risk control ability in six banks are all above 0.6.But there is a lack of certain aspects of some Banks. For example, Wenzhoubank’s.scaleefficiency.isnot.optimistic,eveninapoorstate.ZhejiangTyronebankprof itabilityvolatile,scaleefficiencyandpuretechnicalefficiencyislow,which indicate Tyrone Banks managementcapability, scalelevel remainstobepromoted.Zheshang bank’s capital managementability is strong, the abilitytocontrol is effective, has defects inthecapital scale.In view of the above results, this article improves following suggestions in the external environment and internal environment of the private banks. From the external environment, we.should.improve the system of market access to private Banks,.and establishreasonableandperfect supervision mechanism and deposit insurance system, at the same time,.we.shouldadjust.tax policy.In internal operation and management, private banks should.establisheffective internal control system,.strengthen supervision,.and.eliminate relatedtransactions..At the same time,.we.should.pay attention to the introductionof professionaltalents,.set up.the commercial se rvice idea, and find a private bank’s growth and prosperity road.