The Analysis On The Profitability And Impact Factors Of Huishang Bank

The profitability is the critical factor to commercial bank and the key factor to measure its competitive power. Only with the continuous improvement of profitability, the commercial bank can achieve sustainable development and stay the same position in the fierce competition. In the current economic, financial environment is complex and changeable. The downturn of macro-economic brings insufficient demand of credit, the credit risk explosion of enterprise, market-based reform of interest rates. And shunt effect of Network finance also has great impact on the commercial bank’s profit. Commercial banks face many difficulties to ensure their continual improvement. Huishang bank as a regional commercial bank faces with more pressure. So it’s important to analysis on the profitability and impact factors of Huishang Bank. Our analysis can help us find problems and take a feasible measures for enhance profitability of Huishang Bank.We use decomposition of profitability to analyze Huishang Bank’s profitability based on data 2012-2014. We also use profit-making model to analysis the impact factors of profitability of Huishang Bank. As with domestic banks, assets return of merchant bank on assets declined and profit growth slowed year by year. The main influence index is rate of return of interest bearing assets, rate of payment of interest bearing debt, net non-interest rate of return, non-operating rate of return. So, the main impact factors are Deposit and loan spreads, intermediate business income, investment income and management costs. The main profit of Huishang Bank comes from net interest income. Although the the investment income and intermediate business income increase year by year, that Huishang Bank’s income still relay on deposit and loan spreads is not changed. At present, Huishang bank is facing prolems that income source is too single, non-performing loans continued to increase, loan revenue declines, the cost of deposit rises. So the article puts forward vigorously develop intermediary business, improve return rates of loan, reduce deposit rate, optimize the investment structure, and make efforts on dispose of non-performing loans to improve the profitability of Huishang Bank.