The Research Of The Efficiency Affecting Factors Of Chinese Rural Commercial Banks

Rural commercial bank is a main part of the financial system of China and it is one of the most important financial institutions, which is a special product during the process of our country’s reformation. Since the first three rural commercial banks were established in 2001, it has gone fifteen years of development,and now it is popularized nationwide and has become a major force to promote the development of rural economy. During the fifteen years, all aspects in business activities of rural commercial banks have significantly changed, such as the asset dimensions, asset quality, profitability and risk-control capacity.With the deepening of financial system reforming and the decreasing of global economy, Chinese financial market becomes more complicated and varied, therefore rural commercial banks are facing increasingly fierce challenges and threats. Especially, in the past two years,our country have paid more attention to rural financial services and inclusive financial issues in macroscopic level, so it is important to improve financial services for rural areas and farmers. Which not only provides a rare opportunity for the development of rural commercial banks, but also put forward new requirements and challenges. So it is necessary for rural commercial banks to keep high efficiency in all aspects of business process to achieve sustainable and healthy development.This paper selects 41 rural commercial banks as samples with the 2012--2014 years of financial data as the research foundation. Firstly, we use financial analysis model to select eight financial indicators which represent the different aspects of bank business activities. Secondly, this paper identifies the common factors affecting the efficiency of rural commercial banks by using factor analysis model, and give the name based on the actual meaning. Then calculate the total score and give ranking of rural commercial banks by using multiple regression analysis. To test and verify the accuracy of the empirical results, we make use of the entropy method to compare with the analysis of factor model, we find that the results of the two methods are unanimous. Finally, according to these major factors,we make practical recommendations to improve the efficiency of rural commercial banks.The paper is divided into five sections as follows:the first part summarizes domestic and foreign related research achievements of literature, and introduces the research background, theoretical and practical significance, main content and methods, the deficiencies and possible innovation points in the paper. The second part is the summary analysis of the rural commercial bank situation, in which we first reviews the development of rural finance in China, and then introduce the conception of rural commercial bank, background and the different development stages of rural commercial banks, and last analyze its current situation, strengths, weaknesses, and the possible direction of future development. The third part describes the present situation of commercial bank efficiency and its influencing factors theory, which first introduces the concept of commercial banks efficiency, influencing factor theory and measurement method, then gives theoretical analysis of financial indicators model, factor analysis model,entropy method which used in this article analysis. The fourth part is the empirical analysis of rural commercial Bank efficiency; we first select sample data and analyze by the factor method and entropy way, then make comparison of this two. Finally, give the analysis of the main factors according to empirical results. The last part is the conclusions and suggestions; we take corresponding measures and recommendations according to the empirical results.The paper has shown that:(1) the main factors influencing the efficiency of rural commercial banks are asset management factors, operational risk factors, innovation and capital adequacy factors; (2) the results of factor analysis and entropy method are consistent, so entropy method can be applied to the study of bank efficiency.