The Performance Investigation And Risk Management Of The Banking Industry In China

Nowadays,the bank is the core of the financial community in the world, theoperation of a country’s economic is closely related with the bank’s development. Atpresent, the state-owned commercial banks have restructured already, foreign bankscontinue to emerge, in this case, the bank’s performance have become the issue thatthe financial industry most care about.So improving the bank’s performance is thekey to maintain stable economic development,also the key to improve the bankingmarket competition.Based on this, this paper discusses the influence factors of the commercialbanks’performance in China.First review the international research’s literature onbank performance, then discuss the measuring indicators and methods of bankperformance. And on this basis,the impact factor of bank performance are studiedbased on the theory and evidence: profitability, management ability, the developmentof capacity and safety. Then this paper determines which factors play a key role inbank performance,thus proposes on how to improve the performance of commercialbanks in China.In addition, on the basis of the research of the bank performance, this paperassess the banks’ risk by introducting the VaR model. As a kind of the quantitativeanalysis tool, VaR model is, in recent years, widely used as a financial riskmeasurement technology in the international financial domain. That it’s a quantitativeanalysis method,makes risk management objective and scientific. This paper mainlyby combining the performance and VaR model, assess a bank whether there is anyrisk in China, and put forward the VaR model in China’s banking industry in the useof risk management.The conclusion of this paper is that the bank performance is influenced byprofitability, management ability, the development of capacity and safety. Profitabilityis the most important factor.Management ability is the second one.Next is thedevelopment of capacity.The last one is safety. With the help of the VaR model, theauthor find that the16banks’ performances are good and the market performance isalso good. The risks of these banks are at a low level, the degree of risk managementmay be appropriately lower.