Research On The Factors Of Profitability Of China’s Listed Commercial Bank

During the two sessions of last year, Xi Jin Ping explained the "China dream", he said "China dream" is to realize national rich and strong, people’s happiness. This just is the starting point of China’s financial industry. Outlook on China’s financial new decade, China’s "financial dreams" should make all the people enjoy the benefits of financial. Chinese financial industry has courage to innovate. Chinese commercial banks have made outstanding achievements, but there is still a big gap with the world advanced commercial Banks. In the commercial bank’s comprehensive strength evaluation index, profitability is the core factor. The profitability of the Banks affects and restricts the reform and development of China’s economic directly. Due to various aspects of China’s market economy is not perfect, Chinese commercial banks’80%-90%source of income is the differential section between deposit and loan. Intermediate business income and other income accounted for the total income is very small. Under the pressure of interest rate market and financial disintermediation, China’s banking profit space is gradually narrowed. High profit growth has disappeared. In the face of fierce market competition, the adjustment of our country commercial banks’profit model has become the urgent affair.Based on the above analysis, the purpose of this paper is to analyze the factors affecting the profitability of listed commercial Banks in China and research how they affect the profitability of commercial Banks. At the end of the paper we put forward some good suggestions to improve Chinese listed commercial banks profitability.In this paper we use the date of13listed commercial banks from2008to2013as the sample. We experiment with Eviews6.0. We use the panel date model to study the factor of Chinese listed commercial bank’s profitability. We use multiple linear regression model to do robustness test. By comparing the two kinds of econometric model, the empirical analysis results are basically identical. According to the empirical results, we put forward some good suggestions to improve the profitability of listed commercial Banks in China.The experimental result is the capital adequacy ratio、 asset size、 the consumer price index are positively correlated with profitability. The rate of bad loans、 cost-income ratio、 asset-liability ratio、 the GDP growth rate、 supply of broad money and banking climate index are associated with the profitability of negative. The conclusion of this paper is:For internal factors, moderately improve the capital adequacy ratio of commercial Banks, asset size index can help to improve the profitability of listed commercial Banks. Moderately reduce the non-performing loans of commercial banks、 the cost income ratio and asset-liability ratio can help to improve the profitability of commercial banks. For external factors, in addition to the consumer price index is positively related to the commercial bank profitability, the rest of the factors have negative effects on commercial bank profitability. The empirical results show that the relations between external factors with the commercial bank profitability are not obvious. It also reflects the new situation of our country’s current economic development.