Based On The Impact Of China's Credit Card Business Of Commercial Bank Profitability

The credit card industry is developing fast in china during recent years. As a safe, convenient and quick method of payment, it greatly improves the Chinese economy and people’s life. As for the credit card business is newly start in china, it means it has large potential in profits as well as products innovation. What’s more, the credit card business has large effects in attracting individual clients and improves the intermediate business income of commercial banks. So achieving the credit card market has been a focus of Chinese commercial banks these years. But almost all commercial banks has large initial operation cost, which, accompanied by the fierce competition of the credit card industry in China, leads to the negative net profit of credit card business. Until now only three commercial banks in China have announced positive net profit. Does the credit card business have real effects on the profit ability of commercial banks? If does, what’s the degree of influence?The paper starts from this point, describes the main operating mode of the credit card business, the development of credit card market and the profit mode of the credit card business.The paper also builds the model of credit card business, using the panel data of10banks from year2006to year2010to study the relationship between the developments of credit card business and the profit ability of commercial banks. And at last, the paper gives some suggestion for the further development of the credit card business in China.