The Empirical Analysis Of Dynamic Relationship Between China’s Commercial Banks’ Profitability And Intermediate Business Income

In recent years, the intense competition among commercial banks makes the traditional deposit and loan profits continue to be compressed. From the loan growth announced by the People’s Bank, the economic growth and the demand for loans slowdown under the external pressure caused by the changes of interest rates mercerization, macroeconomic factors and regulatory environment." The second five plan of Financial sector development and reform" pointed out that the advance in integrated operations of commercial banks, the deepen in financial reform and financial disintermediation have a great influence on traditional bank profits, and will completely change the situation of banking business in our country." Both the capital share of intermediate business and the business risk are low, commercial banks treat intermediary business as the energy of increase profits, under the premise of making profits by intermediary business, the commercial banks should increase restructuring efforts and expand intermediary business. From the2001People’s Bank of China promulgated the "Provisional Regulations on intermediate business of commercial banks", the development of intermediary business in business banks has entered the fourteenth year. Form the previous academic studies, the intermediate business has a positive correlation impact on the profitability, but the effect is very little. So this issue use the lastest banking data to explore the relationship between business and profitability.In the first chapter, introduces the background and significance of intermediate business in commercial banks, summarizes the research status between intermediate business and profitability and review the related literatures. In the second chapter, define the intermediary business revenue and profitability, after referring to a number of studies selected the appropriate measure, namely rate of return on captial called ROA and median income ratio called ZSZB. From a theoretical point of view, development of intermediate business of commercial banks comply the diversification of banks, financial innovation, economies of scope profitable choice. In the third chapter, select the first quarter data in2007and2013of14major commercial banks, through the calculation of the average bank’s profitability and the median income ratio of the sample banks, from the visual analysis, analyze whether the profitability of banks have the same trends with intermediate business. In the fourth chapter, using panel data in the first quarter of2007and2013of14major commercial banks, then establish four empirical model to analyze the interaction of intermediary business revenue and profitability. According to the analysis of dynamic panel drawn that intermediate business income are positively to profitability. The correlation between profitability and intermediate business income lagged one pair is not obvious. Interest income accounted for the existence have a negative correlation with profitability. Operating income accounted for the existence has a negative correlation with profitability. GY profitability correlation is not obvious. Intermediate business income lagged one pair has a positive correlation with intermediate business. There is a positive correlation between the profitability and intermediate business revenue. In this paper, we combine status in our country and results of empirical.In the last chapter, through the empirical conclusions of intermediate business revenue development to make the accordingly recommendations.