Analysis On The Impact Of Profitabilty Towards Chinese Listed Banks

In recent years, with the expansion of the Chinese banking industry opening up, more andmore foreign banks have stepped into or plan to join in the competition, with their solid capitalstrength, diversified technological methods, modern financial service, advanced risk preventionsystem and powerful financial innovation ability, which has brought severe challenges toChinese banking industry. However, Under the background of today, economic growth isslowing down. Interest rates tends to marketization and privately-owned bank start trial run.Commercial banks are also in the face of pressure domestically. In order to deal with thecompetition at home and abroad currently, our commercial banks need to improve the weak spot,to enhance their own profitability and to strengthen the core competitiveness.Based on the background above, the thesis focus on the impact of profitability towardsChinese listed banks. After reviewing the relevant literatures, take analysis of the currentsituation of China banking. Make a comprehensive of various aspects of theory and personalinductive. Get several impact factors to be determined. With the help of Delphi method, sort outthe feedback of experts, we finally arrive at the conclusions, which include internal factors suchas the scale of banks, asset quality, liquidity, business development, innovation capability,operational efficiency and external factors of macroeconomic situation, policies and regulations.Then take a theoretical analysis and assumption of the above indicators. Select the12majorlisted commercial banks as examples, use the latest data from2004to2012for the empiricalanalysis of panel data. Choose Pooled Regression Model through F-test. According to theanalysis, the main conclusions are as follows: To tell from the indicators about Chinesecommercial banks, The scale of banks, Liquidity situation, business situation andmacroeconomic situation had significant positive correlation with the Bank profitability.Operational efficiency, Loan-loss reserves to total ratio had significant negative correlation withthe Bank profitability.Last but not least, according to the results of analysis, the paper also end up with some recommendations: Regulate bank size reasonably to achieve economies of scale; Improve thequality of assets to prevent credit risks; Maintain adequate liquidity level to reduce liquidityrisks; Improve the traditional business; Promote the financial innovation, vigorously developintermediary business; Reduce the operating cost and improve the operational efficiency;Establish bank cycle macroeconomic reaction mechanism for loss prevention.