Empirical Research Aboub The Performance Of Comprehensive Management And Transformation Of China’s Commercial Banks

With the process of interest rate liberalization graduallyproceeding, traditional business and interest income, as banks’main sourceof profit, are facing many challenges. In order to broaden the source of profitand enhance the existing strengths, banks are implementing operationaltransformation and comprehensive management, by diversifying businesssegments and getting involved in a variety of non-bank financial services.Comprehensive management has become the main way to deal with thethreats on traditional banking businesses and to achieve furtherdevelopments. In this paper, two panel data econometric models areestablished. The first model studies the impact of comprehensivemanagement on banks’performance, and runs a comparison analysis on thedifferences of this effect between large state-owned banks and otherjoint-stock banks. It is found that the positive effect of comprehensivemanagement of state-owned banks is significant, but that of otherjoint-stock banks is not significant. The second model deeply analyses howthe structure of non-interest income influences bank’s profitability, themodel also respectively analyses the large state-owned banks and otherjoint-stock banks as two comparison groups. With this model, it is foundthat fee and commission income contributed significantly to profitability,while investment income and other operating income showed a negativeeffect; the effect of other types of non-interest income are not significant.Through these two models, the performance of comprehensive management can be properly assessed. Finally, based on the empirical results, this papergives reasonable recommendations about how large state-owned banks andother joint-stock banks shall further implement the strategy oftransformation and comprehensive management to respond to interestliberalization, the internet finance and other challenges.