Research On The Transformation Of Chinese Listed Banks Profit Model Under The Interest Rate Marketization

In recent years, the pace of market-oriented reform of interest rates continues to accelerate. Since July 20,2013, financial institutions lending rate control has been fully liberalized, loan interest rate market has been basically completed. November 2014 and March 2015, People’s Bank of China raised twice in succession deposit rate floating range limit of financial institutions, marking the pace of market-oriented reform of deposit interest rates is accelerating. Thus, Nowadays the market-oriented interest rate reform has entered the deep waters. With the development process of China’s interest rate market, the growing competition in the market will lead to deposit and loan spreads continued to narrow, traditional profit model of commercial banks will be faced with severe challenges, the transformation of the commercial banks profit model is particularly urgent. However, how effective about China’s commercial banks profit model transformation? Whether it can effectively improve bank earnings? Whether the direction of the different types of commercial bank profit model transformation is the same? With the development process of China’s interest rate market, above questions become an important issue that Chinese commercial banks need to discuss. This paper will study these questions, with a view to providing empirical support about the transformation of the commercial banks profit model, and thus gives corresponding countermeasures and suggestions.Firstly, the theory of commercial bank profit model transformation is summarized and analyzed, and the commercial banks profit model is defined and specific quantitative. Based on the comparison and analysis on income diversification index, the proportion of non-interest income (PNII) and income diversification based on Herfindahl Index (DEV) is selected as commercial banks profit model specific quantitative indicators. Meanwhile, methods for testing and setting panel data model are summarized and reviewed. Then, this paper reviews the process of market-oriented interest rate reform in our country, analysis of the influence mechanism of interest rate marketization on commercial bank profit model, and analyzes and compares the development status and trends of China and American banks profit model, thus elaborates the necessity and urgency of the transformation of Chinese listed banks profit model under the interest rate marketization from the theoretical and practical perspective. Finally, this paper makes empirical analysis on the effect about China’s listed banks profit model transformation. This paper selected the data of sixteen listed banks in 2006 to 2013 as the research sample, to set up panel data model to make an empirical test of the impact of Chinese listed banks profit model transformation on bank earnings.This paper gets the following conclusions from the first three parts:(1) With the development process of China’s interest rate market, it is necessary and urgent to change the profit model of Chinese listed banks; (2) The proportion of non-interest income of Chinese state-owned commercial banks is much higher than that of joint-stock commercial banks and city commercial banks, showing that Chinese state-owned commercial banks has advantages in expanding the non-interest income; (3) The different sizes of commercial banks implements differentiated profit model in American, it’s worth our reference. Through the empirical study of the fourth part we conclude that:(1) Changing in profit model have a positive effect on bank earnings of all Chinese commercial banks; (2) The impact of changing in profit model and expanding the non-interest income of Chinese state-owned commercial banks on bank earnings is generally higher than that of joint-stock commercial banks and city commercial banks, so Chinese state-owned commercial banks have advantages in profit model transformation; (3) The effect of changing in profit model of Chinese joint-stock commercial banks is not as well as the state-owned commercial banks, and they don’t have cost-savings advantages when they change in profit model, so they should expand non-interest income and change in profit mode under the premise of strict cost control; (4) The coefficient of cost-income ratio of Chinese city commercial banks is much smaller than other banks, the coefficient of asset size is negative, and the impact of profit model transformation on bank earnings was not significant, so city commercial banks haven’t advantages in profit model transformation, maintaining an appropriate size and focusing on traditional interest income will be more conducive to their development. Finally, this paper puts forward the countermeasures and suggestions of Chinese commercial banks profit model transformation based on qualitative research and empirical research conclusion:In our country, the different types of commercial banks should implements differentiated profit model transformation strategy, large commercial banks should have integrated management as the transition direction; medium-sized commercial bank should have specialized management as the transition direction; and small commercial banks should focus on traditional interest income and pursue regional specialization.