The Effects Of Non-interest Income On The Financial Performance Of City Commercial Banks

City commercial bank is the product of financial system reform, and it is the important supplement of the banking industry in our country. City commercial bank was established to serve for the local urban residents and rural enterprise, in less than 20 years of development, city commercial banks has made great contribution for the development of the local economy, and has been greatly improved in terms of asset quality and scale benefit. However, as the change of business environment, such as financial disintermediation, interest rate marketization and intensified competition in the banking industry, the traditional credit space of the city commercial bank becomes smaller and smaller, so it had to diversity, and develop the non-interest business actively. Although the increase of the non-interest income will make the source of income increase, it also bring cost and risk, so we can see from the theory and the practice that there is not a certain relationship between non-interest income and city commercial financial performance, to the end, many city commercial banks take the wait-and-see attitude. In this paper, we mainly study the relationship between non-interest income and the bank's financial performance, trying to clarify the relationship between the two, and put forward some policy recommendations for the further development of non-interest business.This article selects 25 city commercial banks whose assets more than 150 billion by the end of 2014 as the research object, we use the data of wind and csmar database from 2008 to 2014 to set up the panel model, and to study how the non-interest business and its components impact the financial performance of city commercial banks, the conclusion is: the proportion of the non-interest income increase will significantly improve the financial performance of city commercial banks, which, in each part of the non-interest income, the investment income ratio and the change of fair value gains ratio have a positive influence on the city commercial banks, net fee and commission income and other business income ratio have not positive effects on the financial performance of city commercial banks, but it is not significant, foreign exchange gains and losses has not significantly reverse effects on the city commercial banks. City commercial banks should adjust the structure of non-interest income according to the specific circumstance, to develop innovative and high value-added non-interest business, to widen the source of the non-interest business, to improve the support of technology and talents, to optimize the development mechanism of the non-interest business, and finally realize the sustainable development of city commercial banks on non-interest business.Innovations of this paper are reflected in two aspects. One is that we clear that the non-interest income can improve the financial performance of city commercial banks by using empirical analysis; second, we analysis the effects of non-interest income business structure on the financial performance of city commercial banks, it is helpful for the city commercial banks to adjust and reform the structure of non-interest business.