The Study Of Intermediary Business And Business Performance To The Domestic Listed Commercial Banks

The purpose of this study is to explore whether we can really enhance commercial Bank’s business performance through the development of intermediary business in order to promote profit, and maintain business performance and steady growth. Than trying to make further suggestion about how to develop intermediary business of China’s commercial bank facing increasingly strict financial regulatory environment and under increasingly intense financial competition environment.Since China’s current macroeconomic situation and financial market environment, commercial banks are facing more competitive pressure in traditional assets&liabilities business, limited development space, and urgent need to enhance the level of service. Commercial banks now are actively developing strategic transformation which from "scale-oriented" to "value-oriented".There are two main directions in this field.One is business restructuring, the other is transformation of customer service model.About the first aspact, the key point is to convert from a single profit model to multiple profit model. What we should do is to meet market demand, innovate and rich varieties of intermediary business, in order to achieve the transformation of intermediary business.From the data description about2012, the annual intermediary business income scale of the whole16listed commercial banks is495.618billion RMB, with an increase of13.04%compared to the last year. ICBC, BC and CCB all compeleted a better performance,whose intermediate business income exceeded20%of total operating income,which proof that intermediary business has occupied a certain status among commercial Bank’s whole business.This article takes16major listed domestic commercial banks as example,analysing large amounts of data of their operating results from2006to2012and in depth analysis of the development scale, growth, income structure of the intermediary business; conducting a comparative analysis of the intermediate business in product returns and costs, inputs and outputs, matching strategy and business assets&liabilities.When we investigate intermediary business from the perspective of time,we can make some conclutions.In2006, intermediary business revenue accounted for below10%of total listed commercial banks" operating income. Then this proportion experienced an upward trend, in2012,the number fluctuated in20%. While the cost of intermediary business divide the income of intermediary business saw a fall from19.35%in2006to7.57%in2012. These changes demostrated the scale of intermediary business was expanding while the efficiency of intermediary business has been improving.When we make a horizontal comparison,we will discover something different. In the intermediary business market, large-scale state-owned commercial banks still occupy the main section. In2012, the intermediary business income of five state-owned commercial banks was RMB389.996billion, accounting for79percentage of the whole market; However, on the other hand, the small-medium sized joint-stock commercial banks enjoyed a relatively high speed of development of intermediary business, the intermediary business revenue growth was37.16%in2012compared to the last year among the eight joint-stock banks, while the proportion of state-owned banks was7.83%.And then,through the creation of intermediary business and Bank performance evaluation index of panel data regression model, we can make conclusion and get the economic interpretation.This article use empirical analysis method trying to research the relationship between intermediary business development and commercial banks’operating performance. I set two index to represent intermediary business development,which are intermediary business scale and intermediary business efficiency.And then through panel data model, getting the following conclusions: the expansion of the scale of intermediary business and the improvement of efficiency among all commercial banks’intermediarybusiness have a positive influence in promoting commercial banks operating performance. And the sensitivity between the two varies.This paper argues that commercial banks can develop intermediary business through the following channels:rich and innovate product category, improve intermediary business revenue structure, improve intermediary business cost management system. Thus commercial banks can effectively improve operating performance level and further accelerate the pace of strategic transformation. In the process of developing intermediary business,there are three main points. First of all, we should focus on the profitability and its risks simultaneously. Despite the intermediary business don’t occupy or just occupy less bank’s capital,it seems that this kind business has lower risk, but in the current high-speed developing of intermediary business environment, we should focus on the importance of risk controlment in order to maintain healthy development of intermediary business for example,there exists serious default risk in the business of guarantees and commitments. Secondly,since intermediary business is a kind of technology-intellegence sensitive business,we should focus on the overall progress of the facilities, systems and personnel training. Such as the intermediary business cost accounting requires indirect costs reasonably and accurately allocating to the business lines,so scientific management method and cost-control system are needed. Thirdly, the overall pace of structural transformation of the commercial banks requires balance development on the assets&liabilities business and intermediary business. They are not isolate with each other. Many varieties of intermediary business rely on assets business, liabilities business directly determine the size of the assets. So how to correctly handle the structure and direction between the three is the core to elevate the bank’s overall business performance.