The Comparative Analysis Of The Banking Profitability In Linyi City

Since 2001, with the financial reform, the internal and external business environment of China's bank is undergoing dramatic changes. Full liberalization of the banking market, in particular, the presence of the foreign bank, increased the main competition, expanded the business scope for competition; To some extent, it changed the competitive landscape. Meanwhile, the bank's internal business environment is also undergoing change, the power of capital constraints become more evident. Bank's profitability faced with challenge. To Linyi City, in 2010, with the emplacement of a large number of Small joint-stock banks, increased more competition in the market incentives. What are the key factors that affect the profitability of the financial institution in Linyi city? The relationship of them, the answers to these questions might be provide some help to improve the profitability of the banks.In this paper, on the basis of research ideas and methods of recent studies, we select Linyi Branch of Industrial and Commercial Bank of China, Linyi Branch of Agricultural Bank of China, Linyi Branch of Bank of China, Linyi Branch of Construction Bank of China, Linyi Branch of Postal Savings Bank of China, the rural credit cooperatives in Linyi City and Linshang bank as the sample. We select the return on assets, the proportion of non-interest income, the growth rate of book profit, the ratio of non-performing loans, the year growth rate of deposit, the year growth rate of loans, asset-liability ratio, cost to income ratio, expense ratio of assets, the market share in deposit and the market share in loans as an indicator. We use the samples and indicators for the empirical analysis, in order to eliminate the impact of the dimension on the index data, We standardized the data, then we used the principal component analysis on the standardized data, eliminate the correlation between various indicators, multiplied indicators of the original condensed into one or more comprehensive indicator, which is called the key explanatory factors. The empirical analysis, discussing the impact of the key factors on the profitability of the banks in Linyi City; with the result of empirical analysis, we proposed a lot of reasonable measures and suggestions for the development of the banks.