The Analysis Of Commercial Banks Operating Performance Based On The Capital Structure

After the reform and opening up, especially after accession to WTO, China’s banking sector gradually internationalized with broader development stage, which also means that the future risks and uncertainties may increase. In addition, as an important part of the financial industry, banking sector stability will play a supporting role in maintaining China’s economic order and promoting China’s economic development. Therefore, during the process of commercial banks’ business management, it must subject to the supervision of regulatory authorities. In June2012, the China Banking Regulatory Commission(CBRC for short) promulgated the "commercial bank’s capital management approach (Trial)", and will come into effect in January1,2013, which is also in line with the new international regulatory standards and conformed to the actual situation of China’s banking capital regulatory system.The purpose of this article is to explain the impact on commercial bank’s operating performance from a perspective of commercial bank’s capital structure. However, the capital structure of commercial banks is a multi-level. Therefore, it is important to not only analysis the core capital and supplementary capital, but also considers the nature of ownership concentration problems after the reform of public. Besides, commercial banks also pursue maximizing value for shareholders, and in the same time consider the level of risk. So, the commercial banks need to find a balance to taking relative regulation and profit maximization into consideration. Therefore, the paper first analysis both commercial bank operating performance and capital structure, and then analyze the correlation between the two parts, and finally make corresponding recommendations. As follows:Firstly, determine commercial banks operating performance indicators. This paper constructs a business performance rating system based on principal component analysis, which is a statistical process of extracting the main component from a plurality of interrelated indicators, and integrating multiple indicators into a few simple indicators. In this paper, define ROE, EPS, and cost to income ratio as profitability indicators; define net profit growth, earnings per share growth, and the growth rate of net asset as growth ability indicators; define non-performing loan ratio, NPL coverage rate, and the capital adequacy ratio as safety indicators; define deposit ratio, and liquidity ratio as liquidity indicator. The above eleven indicators is the original index, and then use the software of SPSS19.0to analyze the main components of the sample and lastly obtain the composite score, which can measure the level of commercial banks operating performance.Secondly, analyze commercial bank’s capital structure. According to the requirements of central bank and the CBRC regulatory to commercial banks, the paper mainly analyze commercial bank’s core capital and subsidiary capital. Specifically, the core capital is constituted by the capital and reserves, and the supplementary capital is constituted by the general loan loss reserves, long-term subordinated bonds and convertible bonds. This paper analyze the capital stock from the perspective of ownership concentration and the nature of equity capital, analyse the role of reserves in the proportion of core capital from the perspective of resisting risks and refinancing, and analyze the supplementary capital from the perspective of financial leverage. In this section, the paper analyse the existing differences and the reasons between China’s joint-stock commercial banks and state-owned commercial banks in the capital structure, which is based on the financial report of16listed banks in2012, and lastly give a certain explanation of the a certain explanation in the capital structure.Thirdly, conduct an empirical analysis of the sample data. The purpose of the article is to study commercial bank’s operating performance from the perspective of its capital construct. Therefore, the explanatory variables and the explained variables can be easily defined. According to the theoretical analysis, there exists certain correlation between the explanatory variables and explained variables, and thus this paper makes some assumption between them before the empirical analysis. This paper adopt the panel data of2009-2012of the16listed banks, and then select the proper model according to the characteristic of the data. After that, conduct the F-Test and Hausman Test, and then make sure that the individual random effects model is the proper one. In this paper, the software of Eviews6.0is adopted to analyze the sample, and illustrate the relationship between the explain and be explained variables according to the significance of regression parameter. Lastly, compare the assumption and the actual result, and give some interpretation to the different points.Finally, make some recommendations and opinions. The operating performance of commercial banks is affected by many factors, and this paper mainly analyzes the bank’s capital structure. Therefore, this paper put forward corresponding proposals to raise the level of commercial bank’s performance from the perspective of perfecting commercial banks’ capital construct. Therefore, this paper gives three aspects to optimize commercial bank’s core capital, such as raise the proportion of net profit retained,establish a relatively balanced ownership structure and diversify equity investment, and suggest to broaden the source of supplementary capital to diversify the subsidiary capital. Meanwhile, further improve our national capital market, which is the premise and foundation to optimize commercial banks’ core capital and supplementary capital.