Theoretical And Empirical Study Of The Development Motivation Of Chinese Banks' Off-balance Sheet Business

With the increasing internal competition. China's commercial banks allocated more resources to the off-balance sheet activities, as of the end of 2014, the proportion of net non-interest income of commercial banks increased from 6.51% in 2005 to 21.37%. Off-balance sheet activities of commercial banks have made rapid development, and the types of off-balance sheet activities of the different types of bank are different. One explanation is strategic drive. There is a cross-selling strategy between balance sheet and off-balance sheet activities. It's relationship strategy. Commercial banks can lower prices of balance sheet activities to maintain a good relationship with customers and provide off-balance sheet activities to the same customers, or by reducing the prices of off-balance sheet activities to develop it, and then improving the prices of balance sheet activities, we define the former as the first type of cross-selling strategy, the latter as the second type of cross-selling strategy.In this paper, the empirical research is through two hypotheses:The firstly hypothesis, there is a negative (positive) correlation between balance sheet and off-balance sheet activities; The second hypothesis, the risk influence coefficient will reduce (increase). Using 51 commercial banks'2006-2012 data to establish the panel data model. The first part, the paper separated the spread from the NIM according to Angboz'dealership model. The second part, the paper tested the two assumptions of cross-selling strategy from the overall sample. The third part, the sample was divided into large banks and small banks, two hypotheses were tested separately.The empirical results show that there is a first type of cross-selling strategy between balance sheet and off-balance sheet activities, the commercial banks adopt the relationship strategies. Specifically, the middle and small banks adopt the relationship strategies, but it can't determine whether there is cross-selling strategy among big banks'balance sheet and off-balance sheet activities. Therefore, it needs further study whether the big banks taking trading type strategy.