Research On The City Commercial Banks’ Efficiency

Efficiency is the centralized reflection of the competition ability of commercial banks, which is the key element to preclude financial risks and open up the banking industry. Efficiency is one of the cores of economic study. It is also the core of management of enterprises including banks. Efficiency of commercial banks is not only the determination of their own competence, but also the determination of the quality of economy. Especially in the developing countries, there are lots of problems in their economic system, and the banking industry is a concentrated embodiment of these problems. The research on the banking efficiency has been one of the main issues for the international financial sector and every supervisory authority over the last two decades. The efficiency of Chinese commercial banks aims at minimizing the input and maximizing the output. That is to say economizing the cost input farthest or promoting the maximization of returns. Now, with the commercial reform and the establishment of commercial banks as well as the entry of foreign capital banks, the competition environment of the banking system forms gradually. Meanwhile, City commercial bank is widely noticed as one financial power which develops very fast. And efficiency has been the reality that commercial banks can’t avoid.The article introduces the feature, classification and system of commercial bank firstly. According to the classification on system, selecting 3 types 14 banks as samples, subsequently it presents the meanings of commercial banks efficiency and some common ways assessing it, then it lists the current research on city commercial banks of China.On the basis of conclusion of foreign and domestic research documents, The paper uses the Data Envelopment Analysis(DEA) approach to measure the technology efficiency, pure technology efficiency and scale efficiency of 14 commercial banks in China from 2003-2008.The comparison among the state-owned bank, share-hold bank and city commercial bank, and the multiplied index comparison in one bank let us have a general view over the management efficiency of every bank and the difference between the factual value and the theoretical value. Then the econometrics model is put forward. Taking the efficiency values computed as the dependent variables, analyze the data fully, gain the effect property rights structure have on the city commercial banks efficiency.The low efficiency of city commercial banks enforces the necessity to improve it. In the way of improving efficiency of city commercial banks, property system, corporation management structure and human capital configuration is to be improved.The research is taking advantage of the knowledge of finance, economics and management theory, DEA model and the original data. It comes to the basic efficiency value which is close to the reality of bank industry of our country, and it gives a whole vision to the resource using situation of city commercial banks of our country.