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

Financial industry is very important which is related to the people's livelihood. With the construction and progress of the financial industry, the economy develops smoothly. The bank is one of the most important branches of the financial industry. The emergency and development of the bank accelerate the market exchange, and promote economic activities. Because of the pivotal position of the bank, every government focuses on the development of the banks in their own country. Over the years, the domestic and foreign scholars have been interested in the field of the banking industry. And their efforts improve the theory and practice of the banking industry.The banking industry started late in our China, and it still in the initial stage. The domestic and foreign scholars have been discussing the problem of how to optimize the capital structure in the bank, and they never get the consensus. Nowadays, the world economic situation is violating, and the domestic economic situation is difficult to predict. In this circumstance, our Chinese banks face to the enormous opportunities and challenges. How to perfect the capital structure and improve the performance is the common issue of the banking industry.In this paper, I choose the 16 listed commercial banks in China as the samples, and analyze their capital structure and performance thoroughly. On the basis of the in-deep analysis of the indexes one by one, I make the empirical analysis on the capital structure of the bank and take the EVA and RORWA as the explanatory variables separately. In the analysis of the status quo of the Chinese listed commercial banks, we can get the summary that ---as the continuous improvement of the regulatory system and the continued strengthening of the supervision, the capital adequacy ratio of the banks is well in total, but the ownership structure and the option type is much complicate. When it comes to the operating performance, the banks behave generally well---the bad loan ratio reduces year by year and the provision coverage ratio goes up step by step. The yield indexes are different since the diversity of the scale of the banks and the unequal of the stage etc. In the sample regression analysis, the overall equation regression results qualified. The ownership concentration, the asset-liability ratio are negatively correlated with the performance. And when the largest shareholder is the state-owned shares, the performance of the bank is a little worse than others. In another side, the capital adequacy ratio is positively correlated with the performance of the bank.The empirical results are consistent with the assumption of the model---the Chinese banks should control the debt-asset ratio which would improve the business risk and deteriorate the business environment. Therefore, the banks should adjust the capital structure, enrich financing instruments, and subjoin the innovative business liabilities. In the ownership structure, because of the behavior of the state-owned shares due to the political factors, the target is deviate from the single profitability objective. All these would bring adverse impact to the bank. However, the existing social and economic conditions require part of the banks in the market are controlled by the state-owned shareholders to ensure that the national economy progresses smoothly. So, we must improve the efficiency of the management of the state-owned shares, diversify the state-owned shares, and introduce the strategy investors to promote the diversification of the investment subjective. With some suggestions above, I wish the rational capital structure would play an important role in the improvement of the performance of the bank, would enhance the competitive ability. I wish our Chinese listed commercial banks would be successful in the competition with the international famous banks.