The Research On Cost Efficiency Of China Listed Commercial Bank And Influence Factors

The research on the efficiency and its factor of the commercial bank is the new topic in theperformance evaluation of a financial institution. The efficiency of bank is the core problem of thebank’s competitiveness. Improving bank’s efficiency means higher output in the condition of thesame input,or lower input in the condition of the same output. Listed commercial bank occupies alarger market share in China’s commercial banks, According to wind Statistics show.In2011,12listed commercial banks get net interest income of1.68trillion yuan which accounts about80%of the total industry profit.The level of development of listed commercial banks is on behalf ofthe development of our entire financial sector.Listed banks in our country are most rapidlydeveloping and having relatively perfect management and they are an important constituent in ourcountry banks. Efficiency of the listed bank is very important to improve the level of social resourceallocation, stable economic operation and prove the development of our country financial market.As the cost efficiency is the basis of bank efficiency, so the study of cost efficiency of Chinesecommercial banks is vital significance whether in theory or in reality.To measure the level of cost efficiency of China’s listed commercial banks, this paper usesfrontier analysis methods (SFA).Consolidated assets approach and the intermediation approach inthe selection of input and output indicators, this paper selects four input indicators and three outputindicators. The four input indicators are Interest expense, net fixed assets, operating expenses andpersonnel cost, the three input indicators are Total loans,Total deposits and profit. This paper useSFA to estimate the2001-2011cost efficiency and cost efficiency sort of China’s12listedcommercial banks. SFA measure results show that the overall level of cost efficiency of Chinesecommercial banks tended to increase. As a whole, the cost efficiency of state-owned commercialbanks is less than the value of the joint-stock commercial bank efficiency.Analyzing the factors that affect the cost efficiency of commercial banks, this paper uses sixfactors as explanatory variables and the bank cost efficiency as the explanatory variables to establishmultiple regression model. The five factors are ROE, total asset turnover, the ratio of non-interestincome and interest income, capital adequacy ratio and debt-to-equity ratio and equity nature.Theempirical results show that the innovation capacity of the commercial banks does’t significantlyaffect the efficiency of commercial banks. Commercial bank’s profitability, operationalcapacity,ability to withstand risks and mobility have a positive role in promoting the efficiency ofcommercial banks, the greatest impact is flow sexuality,the last one is profitability.