Efficiency Of Capital Utilization In China’s Listed Commercial Banks

Bank is the most important part in China’s financial system, its presence greatly facilitated mobilization and intermediation of idle funds in the society, and it plays as the irreplaceable role of the socio-economic development. If deposits and loans are the base of banks, then the use of bank funds is the most important guarantee for the development and expansion of all banks. It also can be said, the use of funds is the commercial banks’ main business ". Therefore, under the conditions of market economy, banks who want to survive and develop in the market must first attach importance to the use of bank funds.Since China’s reform and opening up, the banking industry has been in a state of high-speed development. At the end of2011, China has a total of five large commercial banks,12joint-stock commercial banks,144city commercial banks, and212rural commercial banks. The total assets of the banking financial institutions reached113.3trillion RMB, the loan balance also had more than82.7trillion RMB. At the same time, China’s foreign corporate financial institutions’number also increased to40. New foreign banks’ continuing entry makes competition in the banking sector even more fiercely, which makes domestic commercial banks must pay attention to funds used in order to be able to create a competitive level of return. How to make good use of funds more effectively? What are the keys to the survival and development of the relationship between China’s commercial banks that improve the efficiency of the fund? And, which factors have a positive impact on the efficiency of the use of funds of commercial banks in China? What factors will lead to the inefficient use of funds? The resolution of these issues will provide alerts and recommendations to further improvements in China’s commercial banks.This paper first introduces the research background, purpose and meaning, as well as ideas and processes. Then summarized and outlined the basis of factors affect the efficiency of the use of funds in commercial banks and introduced ways of banks’capital utilization. The empirical part begins with the use of funds in commercial banks of China based on the status of commercial banks in China, and then introduced the data envelopment analysis (DEA) which is often used to measure the economic issues of organizational efficiency. Based on the data of the nine listed banks in China in2007-2011. a comparative analysis of changes and efficiency are made. Finally, in conjunction with the specific situation of the banking sector, the next step will be how to improve the efficiency of the use of funds of the commercial banks in China and make a few suggestions:to broaden the channels for the use of funds, to reduce redundancies, to bring in talents as well as to improve the use of funds structure.