The Research On Non-interest Income Business And Performance Of Commercial Banks In China

Non-interest income business was not a new word, after the dramatic changes of theinternational financial environment in the1980s, the financial market fluctuatedcontinuously because of the frequent adjustments of the Interest rate and the exchangerate, the phenomenon that we called financial disintermediation arose at the same time,there also has been some shrinkages in the traditional business of commercial banks, allthe above facts made the word appear quickly and received extensive attention. In China,the research on the non-interest income was not complete, so there are some confusionabout concepts and debates about the routes, ways and pros and cons of the businessdevelopment. The purposes of this thesis are to clear concept about the non-interestbusiness, to prove the correlation between the performance of commercial banks andnon-Interest income business in China, to analysis the reasons for existing differencesfrom both theoretical and practical perspectives, and to propose some solutions forreference.The thesis used the panel data analysis and the OLS to obtain the relationshipbetween the explanatory variables and the explained variable, including the positive andnegative correlations, coefficients and the significances. The thesis used a new analyticalmethod that made the state-owned banks and the joint-stock commercial banks separatelyto ensure that the results are more representative and characteristic and to find the exactlyreasons for differences.Through study and empirical testing, this article reached the following conclusions:the correlation between the proportion of non-interest income and the ability of earningfor the state-owned banks was positively, that meant its revenue would be increased inthe wake of expanding the non-interest income business. This conclusion was consistentwith the basic assumption at the beginning of this article. For the joint-stock commercialbanks, the non-interest income business didn’t show the positive relationship, but playeda negative inhibition.After the analysis of reasons for differences as well as the summary about theproblems in developing non-interest income business, this article put forward the countermeasures of further expanding the non-interest business in China at the end of thearticle, including: clearing the dominant position of the fee and commission income andimproving its structure; promoting product innovation, building brand characteristics;forming a industry strategic alliance with the non-bank financial institutions; improvingthe ways of investment for the commercial banks; strengthening self-construction ofnon-interest income business. I think through the above research and suggestions willprovide references for the progress of non-interest income business.