The Study On The Impact Of Commercial Bank’s Capital Structure On Its Operating Performance In China

Since China’s accession to the WTO, the financial industry gradually opening up. Foreign Banks continue to come into the Chinese market, which make China’s commercial Banks are facing unprecedented competition and challenge. So Chinese commercial banks must constantly optimize capital structure, and perfect the corporate governance structure to improve operating performance, and their own competitiveness.Economically, the capital structure refers to all kinds of the source of funds components and the relationship of scale. Company uses various financing ways, which result in the formation of enterprise capital structure. Capital structure have broad and narrow sense. General’s capital structure refers to various properties of the proportion of capital. The capital structure of the narrow sense means the ratio of long-term debt capital and long-term equity capital. The company’s capital structure has a lot of different expressions, such as financing structure, financial structure, and the leverage ratio. This paper’s capital structure is generalized capital structure, It included the proportion of rights and liabilities, the ownership structure and debt structure.This paper stresses the influence of commercial banks’ capital structures on the business performance and then puts forward to some policies and suggestions of optimizing capital structure in order to improve its performance.According to the purpose and idea of the research, the content will be classified into the following four chapters.Chapter one mainly introduces the research background, significance, and the thinking and methods. Since finance industry of China open to the world, commercial banks face much fiercer competition environment. So they need to increase the competitive power. In2008, the global financial crisis was a wake-up call for Chinese commercial bank. They must raise the risk consciousness. The study of the influence of commercial banks’capital structures on the business performance may help to improve the bank’s capital structure and reduce the cost of capital.Chapter two mainly contains capital structure theory. This sector first defines the meaning of the capital structure, then introduces the capital structure theory According to the time sequence, including generation and development.Chapter three introduced the current situation of Chinese commercial bank capital structure and operating performance. Non-tradable shares still exist in some banks.Chapter four shows the empirical research about the influence of Chinese joint-stock commercial bank capital structure on the business performance. This article selected the annual data in2006-2010of the seven commercial banks to analyze the impact that the capital structure act on business performance.Chapter five showed the policy recommendations of this article based on theoretical and empirical results. The suggestion includes to gradually increase the stake liquidity in Chinese commercial banks, to optimizing the structure of China’s commercial banks claims and to optimizing the external environment of China’s banking industry.The innovation of this paper is measuring the business performance of the commercial banks from the safety, liquidity and profitability of commercial bank. The deficiency is less data, which may influence the empirical results.