A Comparative Study On The Effects Of Non-interest Income On The Performance Of Chinese And American Commercial Banks

At present, the income of the domestic commercial banks mainly relies on traditional commercial banking businesses and on the difference between the deposit and lending interest rate. However, the non-interest income that is not included in the asset table has not yet attracted enough attention and its proportion in operating income is relatively low. With the impact of the financial disintermediation and other factors, the domestic commercial banks cannot rely solely on interest income to maintain the original level of profitability, and foreign commercial banks, especially the commercial banks in the United States, have been fully aware of the importance of non-interest income businesses after decades of development, which occupy half operating income of commercial banks. The changes in the operating environment force the commercial banks to increase emphasis on non-interest income businesses,and to take some measures to promote the development of non-interest businesses.But, non-interest income can increase or decreased the performance of commercial banks and what kind of measures the banks should take. These two problems are worthy to be studied and researched.The article selects the commercial banks from US where financial market is more comprehensive and domestic commercial banks as a sample, analyses the development situation of non-interest income and do a comparison.Then the article puts forward some bold assumptions.It supposes there is a positive correlation between the performance of commercial banks and non-interest income and a negative correlation between the squared term and the performance of commercial banks. It also assumes that there is a positive correlation between the major components of non-interest income and the performance of commercial banks.The article chooses the panel data model, and hope to find the dependency relation between the non-interest income and commercial bank performance. The empirical results show that, whether domestic commercial banks or US commercial banks, non-interest income always has a significance on the banks’ performance. Theresults also show that the increase of non-interest income proportion has a positive effect on the banks’ operating performance. When we study the square of non interest income how to effect the banks’ operating performance, the result of empirical analysis also significant. This suggests that the impact on commercial banks’ operating performance presents a inverted U-shaped phenomenon, so commercial banks should pay attention to control the size of non-interest income in the development of non-interest income, which can effectively increase the operating performance of commercial banks.