A Study On The Influencing Factors Of The Performance Of Trust Companies In China

This paper is aiming to evaluate the operating performance of the Trust company in our country and analyze it’s factors. Then the theoretical part of this paper analyzes the factors which are affecting the operating performance of our trust, these factors are divided into two categories, namely external factors and their own factors. External factors including the legal system, the macroeconomic environment, the level of social credit, competitive status. Improvement of the legal system, good macroeconomic environment, high levels of social credit, less competition all helps to improve the operating performance of the trust. Enterprise itself of factors including corporate governance and business strategy two blocks. Corporate governance factors also include three parts, they are ownership structure, board governance and board of supervisors governance. More concentrated ownership structure; a high degree of equity balances; a suitable size of the board meeting; a higher proportion of independent directors;more numbers of board of directors; large size of the Supervisory Board, more times of the Board of Supervisors meeting, the items above all are more helpful to improve our operating performance.Business strategy requires companies to have reasonable asset allocation, suitable asset of human resources, large asset size and great asset quality. Such a business strategy could be helpful of the enterprise’s development, and of the improvement of business performance.Then the article evaluated the operating performance of trust companies in China.Due to the special nature of the Trust industry, the paper did not choose common DuPont analysis and other methods in the evaluation method, instead of using principal components factor analysis. We evaluated the operating performance of 32 selected Trust industry whose data are more complete through principal components factor analysis with the use of SPSS software, and also ranked the sample Trust’s operating performance based on the comprehensive scores.The next part goes to the empirical analysis based on theory. Because the external factors’effects on our trust are mostly the same, thus we choose three large factors which have different effects for different companies for the empirical test. Through Eviews6.0 regression methods, we empirical analyzed the selected three factors of external regional environment, corporate governance and business strategy. After empirical analysis we found that most of the theoretical analysis of the conclusions are correct, but there still exists some problems. Independent directors are not taken seriously in our country, there is no real role to play. The Board is held only to solve the problem after, and did not take the initiative to convene. Lacking of independence, the board of supervisors can not perform their duties well. Our trust therefore should pay attention to these issues, and constantly improve and perfect. Through empirical results we could see that our whole Trust’s asset allocation and asset quality are all in good condition, that should be maintained. Meanwhile, China Trust should also take advantage of regional factors Legitimately to promote their own development and to improve their business performance.