Research On Factors And Performance For Development Of Investment Banking Business Of Chinese Commercial Banking

In recent years, China’s capital market has been developing rapidly and the need of enterprise financing has been increasing. Deposit and lending business of commercial banks have been seriously affected, and its profit margin has constantly being squeezed, with the market becoming more competitive. In order to effectively expand the space of development, enhancing market competitiveness and better meet the financial needs of customers, the NY Bank of China is promptly changing its philosophy, optimizing its profit structure and accelerating business transformation. It is take measures to develop investment banking business, such as accelerate product and service innovation and so on. Commercial banks strive to develop investment banking, providing more diverse, convenient service, not only to meet the low-cost direct financing needs of enterprises, but also conducive to further reform and development of the operation mode for domestic banks.Under this background, firstly, this paper summarizes the relevant theories and researches. Overall, scholars take positive attitude for develop investment banking business. However, due to differences in national conditions, foreign researches have meaningful guidance, and researches of domestic scholars lack of empirical test and comparative analysis.Secondly, this paper deeply analyzes the situation of investment banking business of Shandong Branch, from the general situation, regional differences and compared with other banks. This paper argues that investment banking business of Shandong Branch is developing rapidly. However, there are many problems, such as sources of income is relatively single, the revenue structure is irrational, significant regional difference, and so on. Then, it analyzes development environment of investment banking business. From the point of policy environment, at present our country allows commercial banks to carry out most of investment banking business. And from the market environment aspect, direct financing activities of enterprises accelerate the transformation of the capital market, with customers’demands becoming more diverse, complex and individualized. Analyzing from the individual factors, the company opened up the idea of promoting business and investment banking to gain Mutual support and common development through independent investment banking operations.Thirdly, it introduces the empirical test on the investment banking business performance of Shandong branch. It select relevant financial data of 15 secondary branches, use panel model testing the effects of investment banking business for NY Bank performance. Research shows that non-interest income to total operating income increase one percentage point, the scale deposits and loans will increase 42.56%; each bank interest income increase one percent, the proportion of deposits and loans with the expansion of business scale will decrease 56.25%.Fourthly, we utilize the correlation, OLS and stepwise regression to analysis the model. Correlation analysis shows us that there is a strong relationship between GDP, financing of listed companies, number of listed companies, banking structure and non-interest income. However, OLS regression shows us that GDP and number of domestic and foreign listed companies have significant effect on non-interest income on 5% level. Stepwise regression shows us that GDP, number of listed companies, banking structure and market capitalization of listed companies have significant effect on non-interest income. Considering our data is time series, we have used VAR to analysis our model.Finally, relevant policy recommendations to the NY Bank of China of Shandong Branch on how to further develop the role of investment banking for stimulating business performance, effectively enhance the contribution of investment banking commercial banking business degree and achieve strategic transformation operating structure are put forward.