Studies On The Profitability And Influencing Factors Of H Bank

The size of the profitability is a decisive factor to keep sustainable developmentof the commercial bank, so improving profitability becomes the key of promotingcommercial bank’s core competitiveness. But as appearing a series of adverse factors,such as the macro economic’s downturn, acceleration of the reform of interest ratesmarketization, further strengthen of capital constraint mechanism, development ofemerging business such as financial disintermediation, increased competition of themarket and stricter regulation rules, H Bank is facing many difficulties to keepsustainable profit growth. So analyzing profit status quo and finding out thefactors which restrict the steady improvement of its profitability, and then takingcorresponding policy measures, has an important practical significance for H Bankfully digging its own potential, improving profitability as soon as possible andrealizing the profit maximization.Based on the theory of internal management of commercial banks andenterprise competitiveness, this article uses four years’ financial data of2009-2012toanalyze the profitability of the bank. At the same time it uses eight indicators such asnet profit, net profit growth, operating margin, return on assets, net interest margin,non-interest income ratio and cost to income ratio. As a result, H Bank’s profitabilitystill has room to improve. But the growth of net profit, net interest income andintermediary business revenue is declining. So the bank is facing with pressure toimprove profitability. Then this paper analyzes influence factors which restrict theimprovement of profit ability. Influence factors can be summarized as internalinfluence factors and the external environmental factors. Internal influence factorsincludes Operational efficiency, quality of assets, the size of the innovation abilityand risk control ability, external environment factors includes the macro economicsituation, the adjustment of regulatory policy, reform process of interest ratemarketization and the trade competition. In the end, the paper proposes to strengthencost management, Improve the ability of financial innovation development, strengthenthe risk control ability, consummate the internal governance to improve bankprofitability from the micro level. Then from the medium level it puts forward topromote fair competition between banks and strengthen the cooperation betweenbanks. Finally it puts forward to ensure the healthy and rapid development of economic, perfect capital market, improve the regulation and operation system andperfect the financial policy from the macro level.