The Empirical Research On Non-interest Income And Return Of Assets Of Listed Commercial Banks

Since the1970s, the financial market has suffered great changes. Because of financialliberalization and the development of financial technology, the bank industry has becomemore competitive. The western bank paid more attention on adjusting the income structureto seek the additional profit. They increased the reliance on sorts of non-interest businessactivities.In our country, the proportion of non-interest income is relatively low. But the bankshave realized the necessity of changing the income structure due to the tightening interestmargin. On the one hand, more and more foreign banks started their business in Chinesemarket and a lot of domestic non-bank financial institutions started up. On the other hand,the government has relaxed the financial control, the environment changes a lot. Mostbanks want to get more profit through the non-interest business, but the research onwhether it can improve the performance of bank, has not yet come to a unanimousconclusion.This paper starts with the concept and classification of non-interest income. Then weanalyze the intrinsic motivation of developing the non-interest business. We also introducethe current situation of this business in China, and point the restrictions and problems. Asto the empirical part, we select the data of10listed commercial banks in2004-2012as theresearch sample. The result indicates that non-interest income can raise the ROA ofcommercial banks under certain condition. At the end, we analyze the result further, andgive some suggestions on improving non-interest income.