The Empirical Research Of The Financial Development's Influence On The Performance Of Commercial Bank

As the backbone of the financial development in our country, commercial bank plays an important role on a country's economic development, so how to keep the steady rise of business performance in the fierce competition has always been the focus of attention. In 2008 by America's subprime crisis triggered by the financial crisis sweeping the world, triggered the people to the relationship between financial development and commercial banks performance. With the continuous deepening of financial development, its impact on the banking sector are becoming increasingly widespread, financial development and the performance of commercial banks also have more close and complex link. Therefore, this paper starts to study on the relationship between the financial development and the performance of commercial bank by combining quantitative analysis and qualitative analysis, theoretical analysis and empirical analysis.This paper first reviews and summarizes the domestic and foreign scholars' related ideas and formation of the theory about the relationship between financial development and the performance of commercial bank. Based on the financial development theory and commercial bank performance influencing factors theory,the paper analyzes that the financial development influences the performance of commercial bank mechanism, and descriptively analyze the relationship between the financial development and the commercial bank performance. Then, we select the index of credit supply and stock market value as a percentage of GDP as the measure of financial development. The index of return on assets, liquidity ratio and non-performing loan ratio are selected from the three aspects of profitability, liquidity and safety to examine performance of commercial bank. Finally, we make the empirical analysis after the model of financial development and the performance of commercial bank is constructed, using 16 listed commercial banks between 2005-2014 panel data. In this paper, empirical evidence is divided into two stages, firstly qualitative verify the financial development has a long-term and stable relationship with commercial bank performance through the cointegration test. Then, financial development impact on the performance of commercial bank has carried on the empirical research and analysis on the basis of measured using dynamic panel model estimation.The empirical results show that the overall financial development is conducive to the performance of commercial bank, the stock market value of a share of GDP is higher, the stock market development degree is higher, the higher the return on assets, commercial bank can improve the commercial bank liquidity conditions, and reduce commercial banks' non-performing loan ratio. It indicates that the development of the stock market promotes the performance of commercial bank. An increased supply of financial institutions credit will increase the return on assets of commercial bank, but will have some negative effects on commercial bank's liquidity, the excessive growth of credit supply will enhance the non-performing loan ratio of commercial banks. It showes an increased supply of credit impact on the performance of commercial bank has two sides. Finally, combined with the theory and the empirical results, the relevant recommendations are put forward to improve commercial bank performance from the perspective of financial development.