Research On The Efficiency Of Chinese Commercial Banks With Non-performing Loans Constraint

As Chinese economic cyclical fluctuations frequent, banks competitionincreasing and interest market reform, reducing the management risk and improvingthe efficiency become the only road for Chinese commercial banks to enhance theircompetitive advantage.Base on the other scholars’ research, we found that the existing research ignoresthe quality of loans and the slack in the DEA model, which cause measure deviationto the banks’ efficiency. To solve these shortages, based on SBM directional distancefunctions,we analyze the the static and dynamic commercial bank efficiency by usingthe SBM-DEA model and the DEA-Malmquist index model, and at the same time,weanalyze the influence factors for the efficiency by using the panel data model,themain conclusions are as follows:(1) From2001to2010, the overall efficiency of Chinese commercial bank ishigh, pure technical efficiency is higher than scale efficiency; with non-performingloans Constraint, tate-owned bank efficiency is lower than the joint-stock banks;from the projection analysis, employee redundancy and non-performing loans is themain reason for the state-owned banks’ inefficient.(2) By the dynamic analysis we found that commercial banks’ total factorproductivity is increasing, the technical efficiency and technological progress aretending to improve state, technical progress is the main reason for total factorproductivity promotion of commercial banks; different from the most results, withnon-performing loans constraint, state-owned banks’ total factor productivity is higherthan joint-stock commercial banks’.(3) Economic environment, economic policy, social credit and industry factorcan affect the commercial banks’ efficiency; from the internal factors of banks, wefound that ownership structure, bank scale, equity ratios are negative to the Chinesecommercial banks’ efficiency, and going pubic, deposit and loans rate, rate of capital can improve the Chinese commercial banks’ efficiency.(4) After analysis the static, dynamic and effect factors of commercial banks’efficiency, we put forward the suggestion to improving commercial banks’ efficiency,such as further commercial bank ownership structure reform; optimization businessscale, going intensive development road; reducing the non-performing loans, and soon.