Empirical Analysis On Non-performing Loans Of Factors

After several years" reformation and ilmovation of Chinese banking industry.the rate of non-performing loans (NPLs) within domestic commercial banks has dropped drastically. And it seems that such issue has become moderate. However with the data released by China Banking Regulatory Commission (CBRC), although the NPLs have been deprived by Chinese four major commercial banks, we may still need to concern about the NPLs. either the total amount or the percentage compared to the whole loans. In this article, the author believes that the key step to solve the NPLs is to analyze tile major factors and find the solutions for such factors.This paper describes an overview of the theory of non-performing loans, in theory, based on non-performing loans of China’s banking status quo analysis of the causes, the paper that the impact of banks’bad loans to many factors, mainly macroeconomic factors, banks and loan companies own reasons. According to A Bank city branch2005-2010data, build Probit model of empirical analysis on the bank city branch non-performing loans of factors, the results show that:loan clients credit rating, customer unit of economic types and bad loans significantly negatively correlated with the customer base level of negative related, but not significantly correlated. Factors affecting non-performing loans for banks and use foreign experience in dealing with or prevention of n on-performing loans, loans to enterprises from the paper, changes in government functions and strengthen banking supervision and risk awareness to strengthen the Bank and the credit structure to optimize put forward three recommendations to resolve bad loans.Emphasis on the internal importance of the banks to strengthen corporate governance structure, strengthen capital constraints mechanism,improve capital operation efficiency etc.