Influencing Factors Analysis Of Capital Structure Of Commercial Banks Of China

With the financial sector of China opening up to the outside world，it has been one ofimportant tasks to establish a modern commercial bank system and build up bank’scompetence of China. It requires that commercial banks should promote their marketcompetence, improve corporation governance, and optimize capital structure tocounter the strong impact from market competition and foreign banks.This theme is the feature of capital structure in commercial banks, exploring theimpact of bank capital structure factors, and ultimately supplying advice for makingcapital structure. In this paper, we use empirical analysis and normative analysis,horizontal comparative analysis, qualitative analysis and quantitative analysismethods to study the capital structure of Commercial Banks of China.First, the paper has took the capital structure decision theory as the instruction,and combined with banks’ particularity, primarily analyzed commercial banks’ capitalstructure, obtained the characteristics such as insufficient capital, lacking themechanism of capital supplement, the high property debt rate, the insufficientpreparation supplements and the low internal financing ability. Second, based on theanalysis above, the paper has concluded the macroscopic and microscopic factorsaffecting commercial banks’ capital structure, then has empirically studied themicroscopic factor influencing commercial banks’ capital structural model, which hasused8commercial banks’ data disclosed in their annual financial reports from2001to2007. The results of the empirical study imply that there is positive correlationbetween property debt rate and the bank scale, possibility of growth, cost of financialdistress, income tax, and the bank profitability and non-debt tax shield. Finally,according to the empirical study results and commercial banks’ capital structure’scharacteristics, the paper presents some suggestion to optimize commercial banks’capital structure, which includes introducing various funds to increase actual receiptcapital, improving the asset quality to reduce bad loans ratio, strongly developing themiddle-services to increasing the bank profitability, reducing or exempting the tax tosupplement the capital, revaluating the fixed assets, and strengthening financialsupervision.