Research On The Impact Of Deposit Interest Rate Liberalization On The Profitability Of Chinese Commercial Banks

With the deregulation of deposit interest rate of China’s financial institutions, the Chinese interest rate marketization reform has been basically completed. Different from the loan interest rates marketization, deposit interest rate marketization has a more direct impact on the profitability of commercial banks, commercial banks will also be seriously impacted. Therefore, by taking advantage of the comparative analysis method and the empirical analysis method etc.,this article does a research on the impact on the profitability of China’s commercial banks after the deposit interest rate market marketization.To study the impact that deposit interest rate marketization on the profitability of commercial banks in our country,the paper analysize the profitability of Commercial Bank of our country according to the basic theory of interest rate marketization and the particularity of the profitability of commercial banks, as well as through drawing lessons from the experiences of exotic deposit interest rate marketization. Besides, through empirical analysis, it verifies whether the above inference is accurate or not. Finally, according to the results of the research it puts forward the corresponding countermeasures for commercial banks.Referring to learning international experiences, this paper discusses deposit interest rate marketization reform in the United States, Japan, Latin American countries and summarizes the countermeasures that commercial banks in the world take in the face of shocks,that is,development of intermediary business, adjustment of the risk preference and business layout. When refers to the analysis of current situation in our country, this paper analyzes the overall situation of the profit ability of Commercial Banks of our country, then by using a variety of indicators, China’s commercial banks and the importance of commercial banks in the global system were compared and the conclusion is concluded: the profitability of commercial banks in China is higher but business loan is still the profit pillar, the deposit interest rate marketization may be seriously affected. In order to verify this conclusion, the data of 16 listed banks in China has been analyzed by empirical analysis, results shows that under the present condition of our country, per 1% contraction from deposit and loan interest rate will result in 0.34% decline in the profitability of commercial banks, in the international average level, the profitability of the commercial banks in our country may face drop around 20% after the deposit interest rate marketization.once the extreme case occurs, decreasing degree will become more. Finally, according to the above analysis, this paper come up with three suggestions on how to improve profitability, they are developing differentiated development strategy, vigorously developing the intermediate business and continuing to promote the comprehensive management of interest rate risk.