The Empirical Analysis Of Credit Concentration’s Profit And Risk Effect Of Chinese Listed Commercial Bank

The loan concentration of commercial bank is a kind of economic phenomenon. The performance is the credit resource allocation mainly concentrated in certain fields, regions and specific customer group, which can affect the whole national economy and the profit and risk of commercial bank. This effect may be bidirectional, both positive and negative. In order to analyze whether the effects exist, how it affects, and how to cope with, this paper studies the loan concentration effects from the perspective of commercial bank itself. Which means the focus is how the credit concentration affects the profit and risk of commercial bank. The study methods contain quantitative research, qualitative research and normative analysis so as to know the current situation of loan concentration and how it affects comprehensively.First of all, summarize the related theory of loan concentration, conclude the existing studies in and out our country, search out the probable effect of credit concentration, and confirm the research methods.Second, figure out its current situation making use of listed banks’annual reports and regulators’ relevant reports. It shows the credit resource mainly invested in major customer, manufacturing, and developed regions. The length of maturity tends to medium and long term loan. But the increasing speed is slower than short term loan in recent years. Then, analyze the reason of loan concentration, and discuss the positive and negative effects toward profit and risk of loan concentration.Third, introduce the calculate methods and figure out the loan concentration, including customer concentration, industry concentration, and region concentration. In order to see how the loan concentration influences commercial banks’profit and risk, calculate the profit and risk also. Choose "Return on Total Assets" and "Return on Equity" to reflect profit,"Non-Performing Loan Ratio" to reflect credit risk,"Financial Leverage" to reflect financial risk, and "Capital Adequacy Ratio" to reflect monitoring risk.Then, use empirical study method to analyze the loan concentration effect. According to the availability, integrity and uniformity of the data choose fourteen listed commercial banks’ annual reports from the year of2008to2012to analyze. Divide the listed commercial banks into three groups:State-owned Commercial Bank, Joint-stock Commercial Bank, and City Commercial Bank. In summary, the loan concentration has no significant impact on commercial banks’ profit. But the loan concentration can bring potential concentration risk. Specifically, State-owned Commercial Bank’s loan concentration is positive with credit risk and monitoring risk. The customer concentration of Joint-stock Commercial Bank has positive correction with financial and monitoring risk. The City Commercial Bank’s loan concentration has significant effect to risk.Last, according to the results above and the reality, supply some ideas and advises to handle the credit concentration effect from the perspective of supervision organizations, commercial banks themselves, and financial environment construction.