Research On The Relationship Between Income Structure And Operational Efficicncy Of China’s Commercial Banks

At present, China’s commercial banks mainly run the traditional deposit and lendingbusiness, and interest income accounts for the vast majority of the revenue sources. On thebasis of the traditional deposit and lending business, the foreign commercial banks developthe non-interest income business, non-interest income accounts for above40%. With thefinancial globalization, the reform of China’s financial system and the comprehensiveopening to the outside world of the banking industry’s, the traditional deposit and lendingbusiness of China’s commercial banks is facing serious shock, and more and morecommercial banks begin to attach great importance to the development of non-interestincome business.First of all, this paper uses descriptive statistical method to introduce the presentsituation of domestic and foreign commercial bank’s income structure, and qualitativeanalysis on the difference of them. Secondly, this paper uses the super efficiency DEAmodel of frontier efficiency analysis method to measure the operating efficiency ofChinese commercial banks (including technical efficiency, pure technical efficiency andscale efficiency). On this basis, this paper uses the panel data model to establish theregression equation to calculate the influence between the interest income, non-interestincome, different parts of non-interest income, and other control variables and theefficiency of the commercial banks management. Finally, according to the empirical resultsof the relationship between commercial bank’s income structure and business efficiency,this paper puts forward some policy recommendations to improve the income structure andimprove the operational efficiency.Through the empirical analysis, this paper concludes that: firstly, the interest incomehas a positive influence on the operational efficiency of commercial banks, non-interestincome is negatively related to the operational efficiency, and the non-interest income hasan obviously negative effect on the technical efficiency and pure technical efficiency.Secondly, assets proportion has a negative effect on the technical efficiency and scaleefficiency, and has a positive impact on the pure technical efficiency. Thirdly, capitalgrowth rate has no significant influence on the operating efficiency. Fourthly, property feeis negatively related to the technical efficiency and pure technical efficiency of commercial banks, and has no significant positive correlation with the scale efficiency. Fifthly, thesavings and loan ratio has no obvious effect on the technical efficiency of commercialbanks, but is positively related to the pure technical efficiency, is negatively related to thescale efficiency. Sixthly, on the whole, handling fee and commission income can promotethe operational efficiency of commercial banks. Investment income and other income arenegatively related to the operational efficiency of commercial banks.This article’s innovation mainly displays in the following two aspects: firstly, thispaper uses technical efficiency, pure technical efficiency and scale efficiency as a measureto measure the operational efficiency of commercial banks, and on this research this paperresearches the influence between income structure and business efficiency. Secondly,using the super efficiency DEA values of the three kinds of efficiency as the explainedvariable, the different parts of commercial bank’s non-interest income as explainingvariable, this paper sets up panel data to conduct back analysis.