Research On The Effect Of Ownership Structure On Business Performance Of City Commercial Banks

The development of city commercial banks in China is based on the urban credit cooperatives and the urban cooperative banks.The establishment of city commercial banks help neutralizing the financial risk of urban credit cooperatives.Meanwhile, city commercial banks support the development of local economy and small companies.However, because the particularities of backgrounds for city commercial banks,the high degree of concentration of ownership and state-owned property are two main disadvantages and these are not good for city commercial banks to make strategies.Therefore,the effect of ownership structure to business performance of city commercial banks is different of other types of commercial banks.The article considered the different opinions of the domestic and foreign scholars about how ownership structure affects the efficiency of merchant bank.After that, the article explained the effects of ownership concentration and equity properties to city commercial banks based on basic theories. Meanwhile, based on the history and current situations of merchant bank's development, the article concluded for the ownership structure of the city commercial banks.After picking up 32 banks, the article analyzed seven financial data from2010 to 2014, and structured indicator of business performance from four parts which are the ability of profit,management growth,quality of assets and ability of payback.The conclusion of empirical research on the effect of ownership concentration and equity property to business performance of city commercial banks are as follows:(1)negative correlation between the ratio of the largest shareholder and business performance is not significant;the effect of top ten shareholders to business performance is negatively correlated;the existence of balance mechanism can improve business performance.(2)negative correlation between the state-owned property of the largest shareholde and business performance is not significant;the effect of shares of state-owned shareholding ratio to business performance is negatively correlated;the effect of shares of legal person shareholding ratio to business performance is positively correlated;the positive correlationbetween the ratio of the public shares and business performance is not significant.According to empirical results, the article proposes the following recommendations to optimize the ownership structure of city commercial banks:improving the concentration of ownership situation; adjusting the structure of ownership properties; effectively strengthening the supervision of city commercial banks.The article hopes that the implementation of suggestions can improve the current ownership structure and the improve the business performance of city commercial banks.