The Effects Of Credit Allocation About Industry Structure Of Commercial Banks On The Operating Efficiency

The bank’s efficiency is the concentrated reflection of competitiveness. Theimprovement of the bank efficiency is the foundation to keep watch financial risks，andto drive the bank industry’s sustainable development. After entering WTO, foreignbanks with higher efficiency have become an important force in Chinese financialsystem. If Chinese banks want to development in this environment, they must improvetheir competitive advantage, because only efficient banks can remain invincible in thefierce market competition. At present, it hasn’t been changed that deposit and lendingstill are the core businesses for Chinese commercial banks, and the tendency of creditfunds flow into heavy industries and real estate areas is also obvious, which is animportant reason for Chinese banks’ inefficiency. Then, this paper decides to explore theways to improve the Chinese banks’ efficiency from the point of credit structure onindustry, trying to find a reasonable credit industry structure for enhancing Chinesebanks’ efficiency level and overall competitiveness.This paper reviewed the domestic and foreign literature at first, and then selectsour16listed commercial banks as the research sample, using SFA model to estimatetheir cost efficiency in2002-2010periods. Meanwhile, this paper analyzes theestimation results from both horizontal and vertical angles. The research finds: theefficiency of the whole banking increases gradually; the efficiency of state-owned banksis the lowest, and then is the shareholder-owned banks, and city commercial bank is thehighest. Furthermore, this paper build a regression model with measured efficiency asdependent variable and the proportion of industry credits as independent variables, tostudy the impact of the credit’s industry structure on the Chinese banks’ efficiency. Theresults showed that: First, the amount of credit on these industries, including energy,mining, agriculture, commerce, science, education, and personal consumption has apositive correlation with the banks’ efficiency; Second, the amount of credit onmanufacturing, construction, public facility management industry and discount, has anegative correlation with the banks’ efficiency; Third, the correlation betweentransport, real estate with the banks’ efficiency is not yet significant.Based on the above results, this study comes up with countermeasures to enhancethe efficiency of Chinese commercial banks: vigorously developing personal finance,focusing on boosting domestic demand; increasing the credits in mining, agriculture, commerce and science these key and weak industries, further adjusting the creditstructure and strongly support the industrial structure’s optimization and upgrading;Strictly controlling the credit supporting in manufacturing, public facility managementthese areas; carefully making decisions on the credit in transport, construction, realestate these structural overcapacity industries and discount; innovating services,increasing the non-interest business’s contribution.