Operating Performance Analysis Of Commercial Banks In China Based On Principal Components Analysis

This paper is mainly to analyze China's 17 commercial banks'operating condition of 2009 annual. So the data are from each bank's 2009 annual report. The empirical method is principal component analysis method of mathematical statistics. So the related theories of principal component analysis method are introduced in the second chapter part,incuding basic idea,calculation steps and advantages. We can find several comprehensive indices that can affect operating performance of business bank by principal components analysis,it makes comprehensive indices show linear combinations of original all indices and they are not related to each other,these comprehensive indices are principal components that we determine.Therefore we can use principal component analysis to find some principal components to replace original statistic data from complex analysis and evaluation process,it can make complex and trivial work easy,and it can also make us use relevant information and data fully when we research the operating performance of commercial banks,so as to reasonably evaluate and fairly analyze commercial banks.Next we construct this paper's commercial bank management performance evaluation system on the basis of reference to commercial bank management performance evaluation system of home and abroad by the principle of overall,key,stratifity,operability,and combination of quantitative and qualitative. This system can reflect four aspects of bank operating condition,they are respectively profitability situation,asset liquidity situation, asset security situation,and development capacity situation,including specifically ROE,ROA,the Ratio of Cost Income,Capital profitability,Liquidity ratio,Deposit-loan ratio,Capital adequacy ratio,Bad loan ratio,Total asset growth,Operating income growth,Net profit growth,Capital accumulation rate.This paper choose ICBC,ABC,BOC,CCB,BANK OF COMMUNICATIONS,CHINA,CITIC BANK, CHINA EVERBRIGHT BANK, HUAXIA BANK, GUANGDONG DEVELOPMENT BANK, SHENZHENG DEVELOPMENT BANK, CHINA MERCHANTS BANK,PUDONG DEVELOPMENT BANK, INDUSTRLAL BANK, MINSHENG BANK,__EVERGROWING BANK, ZHESHANG BANK,BOHAI BANK as sample banks. The data are from each bank's 2009 annual report,original indices system is settled on the basis of the annual report.So the selected material is relatively new, andwe can see the latest development levels of banking in china by researching this 17 commercial banks operting condition in 2009.The paper's research idea is that according to the actual situation of our commercial banks operating we evaluate banks'operating performance objectively by using reasonable evaluation indics and empirical method.,and finally we can get score function of bank:F= 0.3532×f1+0.1895×f2+0.1389xf3+0.1215xf4, fl,f2,f3,f4 are four principal components we extracte. Throughout the function we can get each bank's comprehensive score so as to see the operating performance level,then analyze the reasons of different operating performance further in order to provide the corresponding countermeasures and suggestions which can improve management level of commercial banks.