Study On Influencing Factors And Countermeasu-Res Of Chinese Commercial Bank’s Loan Quality

Deposits and loans are main business for national commercial banks. Thus thequality of bank loans is directly related to the existence and development of banks,and also related to the stability of national financial system and sustainability ofeconomic development. This paper does theoretical and empirical analysis on thefactors which influence the quality of commercial bank loans in China.Firstly, the paper introduces the research background, and analyzes the subprimecrisis and its impact and then analyzes the situation of the quality of commercial bankloans in China. Through reviewing the theory of the bank loans and related literature,this paper summarizes the main factors which have important influence on the qualityof commercial bank loans. Generally speaking, these elements can be divided intothree aspects: repayment ability of customers, repayment willing of customers,internal control of commercial banks.Secondly, the paper does empirical analysis.(1)Through making use of structuralequation modeling technology, the paper constructs and confirms the impact ofrepayment ability, repayment willing and commercial bank internal control to loanquality. The model’s fitness indexes, including, χ2/df、RMR、RMSEA、GFI、CFI、NFI、IFI&TLI were1.820、0.047、0.064、0.911、0.900、0.952、0.951&0.936. Thetesting outcome revealed that repayment ability and commercial bank internal controlhave negative impact on loan quality of commercial banks, and its total effect were-0.508(P<0.01)&-0.316(P<0.01); Repayment willing affected NPLs and enterprise’sPD negatively and its total effect were-0.274(P<0.05)&-0.281(P<0.05).(2) Thispaper uses correlation analysis to discuss the relationship between macroeconomicfactors and commercial banks’ NPLs. The outcome shows that there is a negativecorrelation between macroeconomic factors and NPLs. The coefficient of GDP, totalsocial consumer goods retail sales, fixed asset investment, import and export volume&M2were0.0226,0.0234,0.0224,0.0221&0.0232.Finally, according to the conclusions of structural equation modeling andregression analysis and the reality that our country commercial banks face, if we want to increase the quality of commercial bank loans, we should reduce the informationasymmetry between banks and enterprises, enhance the analysis of industry andmacroeconomic cycles and improve internal controls of banks and the correspondingregulatory policy..