The Research On Efficiency Of Commercial Banks And Influence Factors In China

The improvement of commercial banks efficiency is not only the key issues ofsteady development of country’s finance, but also the fundamental requirements to thechanges in the world economy and competition from foreign banks in the era ofintegration into the world economy. In this paper, Stochastic Frontier Analysis methodis used to measure technical efficiency of16commercial banks in China’s A-sharelisting of2005-2012. In this paper, net profit is selected as the output indicator, andnet fixed assets, interest expense, personnel expenses and deposits are chose as inputindicators. After selected the input and output indicators, we construct the translogproduction function. At the same time, there are five inefficiency factors, includingNPL ratio, asset liquidity ratio, loan-deposit ratio, the number of institutions and thenumber of employees. We draw out the technical efficiency trends of16commercialbanks in8years, and contrast the technical efficiency difference among thestate-owned commercial banks, joint-stock commercial banks and city commercialbanks listed. Through the series of analysis, we find that the efficiency of state-ownedcommercial banks are generally higher than others, and China Construction Bank hasthe highest average the efficiency, the average value of the minimum efficiency isHuaxia Bank.16commercial banks’ average efficiency is0.78262, still some distancefrom1, indicating a low level of overall efficiency of Chinese commercial banks.In study of influencing factors, firstly, we qualitatively analysis the ten internaland five external factors, and then use the factor analysis for the ten internal factors,finally seven indicators are used as the internal factors. When be sure the final twelvefactors, we use Eviews to conduct panel regression, and regression results show thatin the external factors, CPI and MS have passed the test, and MS has the biggestinfluence; While in the internal factors, in addition to CR5not pass the test, otherfactors have passed the test, indicating that these factors have significant impact onthe efficiency. Meanwhile, the loan-deposit ratio has the greatest influence.