Research On The Intermediate Business Development And The Improvement Of Bank Profitability Under The Marketization Of Interest Rate

In interest rate control period, interest income has become the main source of profit of commercial bank in our country. The income of the interest is rich and stable. Most commercial banks focus on the deposit and lending business, so the business development of non-interest income is lack of motivation. But along with the advancement of the interest rate marketization, commercial Banks gradually lose the profits from the spread between deposit and lending rates. Coupled with the prosperity of monetary market and capital market, the competition among commercial banks is increasingly fierce. The obsolete profit model faces severe challenges. How to adapt to the new situation and seek new ways of development under the marketization of interest rate has become an important problem.In this paper, the first part has made a literal review, and introduced the research achievements of the development of intermediary business both in Western commercial banks and domestic commercial banks. Then the second part spells out the necessity of commercial bank intermediary business’ development, including the concepts and development related theories. And the interest rate marketization and the profit model of commercial Banks have been described in more details. Next part we use 15 listed commercial Banks’ latest data from 2008 to 2014 as sample, analyse the correlation between intermediate business’ income and profit ability among different types of commercial Banks.The result shows the intermediate business’ income and the profit ability of domestic commercial banks has significant positive correlation. The development of intermediary business will improve the earnings level of all kinds of commercial Banks. According to the empirical results, we make suggestions directly to the changes of domestic commercial banks’ profit model and the development of intermediate business. Especially under the marketization of interest rate, developing intermediary business can change the old profit model which the commercial banks pay excessive attention on the spread between deposit and lending rates and bring new increasing point of profit. The intermediary business is a kind of security for commercial banks. It can buffer the impact of the macroeconomic’s changes and it is also the important supplement of the commercial banks to expand income sources. The intermediary business will help domestic commercial banks to cope with the challenge of interest rate marketization and seek the survival road.