Study On The Relationship Between Capital Structure And Business Performance Of Chinese Listed Banks

We have opened our financial market to the world in the end of 2006. This means that our listed banks would face up more competitors from all over the world. So it is important for our listed banks to learn how to survive and develop in the more competitive market.The business performance can reflect asset management capabilities,profitability, capacity utilization of capital and other competitiveness,so it is essential to enhance the business performance. Therefore,the main purpose of this paper is to study that how the commercial banks' capital structure affects its business performance,and find out some solutions to improve the business performance for the listed banks of china.This paper adopts three indexs to measure of the listed bank's capital structure,the three indexs are the core capital,the subsidiary capital and the capital adequacy.use the bank's profitability and the security of assets to measure the bank's performance.Firstly, the dissertation discusses the background,significance of the relationship between capital structure and bussiness performance of Chinese listed banks and the literature review both at home and abroad as well as its research methods.Secondly, try to redefine the meaning of the capital structure and business performance.then it analyzes the listed bank's captal sturcture and business performance in the current situation according to the new definition.Finally, in order to make well-founded conclusions, the paper selected relevant data of China's 11 listed banks from 2005to 2009 as samples. It used multiple linear regression models to analyze how the listed banks'capital Structure affects its business performance. We used SPSS as the statistical analysis software.After analysis, the main conclusion of the study come to the following:(1) The relative concentration of ownership structure will enhance the business performance for our listed banks.(2) The nature of the first major shareholders has no association with the business performance.(3) The banks have un-obvious relationship between the proportion of subsidiary capital and the business performance.(4) The banks have significant positive correlation between capital adequacy ratio and the business performance.According to the conclusions we have gotten, this paper made four recommendations from the perspective of optimizing capital structure to improve our listed banks' business performance.(1)China's listed banks should optimize the core capital structure. Establish the relative concentration of ownership structure,promote the diversification of the investor,and prevent the reform over-emphasized privatisation.(2)they should increase the proportion of subsidiary capital and strengthen the risk awareness.(3) they should strengthen the supervision of capital adequacy ratio.(4)The last but not the least, they should make the capital market more complete.establish a well-developed system of capital markets,and ensure the effectiveness of marketing.