Research On The Relationship Between China’s Listed Banks’ Capital Structure And Operating Performance

Since the reform and opening up, China’s economy has grown rapidly. The financial industry has a series of changes by the opportunity of market-oriented reform,including large state-owned commercial banks’ reform, the commercial banks’ listed, the city commercial banks’ rapid rise, etc. the role of banks in our economic system has become increasingly prominent.With the promulgated of "Basel Ⅲ",the promulgation and implementation of China’s banking regulator made more stringent regulatory capital requirements.The impact of capital structure on operating performance is also increasingly valued by the relevant departments.On the basis of domestic and foreign studies about how the capital structure of listed banks impacts on their operating performance,the paper further compares the findings on the structure of domestic and foreign capital and integrates the relevant theories of capital structure to analyze the current situation of China’s capital structure. At the same time,it also analyzes the theory and development status of the operating performance of listed banks.The paper collects the relevant data between 2007-2013 of China’s 14 listed banks to build up the panel data and set up the relevant model to study the relationship between the relevant variables and operating performance on the basis of statistical analysis. The paper selects ROE as variables to be interpretated. The proportion of the largest shareholder,the ratio of the top five shareholders,the ratio of the top ten shareholders, Z index,CN index, the ratio of the core capital,the ratio of the supplementary capital, asset-liability ratio,capital adequacy ratio, non-performing loan ratio,liquidity ratio, deposit-loan ratio are all selected as explanatory variables. The banking assets is selected as control variables.By analyzing the results of the mode,the paper obtain the following conclusions:there is a positive correlation between the explanatory variables and the operating performance of CN index,he ratio of the supplementary capital,asset-liability ratio,capital adequacy ratio;there is a negative correlation between the explanatory variables and the operating performance of the proportion of the largest shareholder,the ratio of the top five shareholders,the ratio of the top ten shareholders,Z index,the ratio of the core capital,non-performing loan ratio;there is no significant correlation between the explanatory variables and the operating performance of liquidity ratio, deposit-loan ratio.The paper analyzes the status of China on the basis of empirical results and considers that the capital structure of China’s listed banks have further optimization space of improvement.The capital structure’s reasonable optimization will have a beneficial effect on the operating performance. Specific policy recommendations are as follows:optimize the structure of core capital and the supplementary capital structure,maintaining the appropriate level of capital adequacy ratio, optimize the corporate governance mechanism,strengthen government regulation and policy recommendations related laws and regulations, etc.The paper can provide some theoretical basis for the listed banks committed to improving business performance objectives and some reference for government departments to formulate relevant policies.