Research On The Impact Of Non-interest Income On The Performance Of Commercial Banks In China

Asset business,liability business and intermediary business are the main income source of commercial banks.Financial disintermediation,market competition pressure,the change of market demand and financial regulation put forward higher request on the development of commercial banks in the future,encourage commercial banks to optimize the income structure continuously by carrying out non-interest income business.Western commercial banks have already made the non-interest income got unprecedented development through diversification and integrated management,such as vigorously expanding investment banking,securities brokerage,insurance agency,fund sale,etc.In the contrast,due to the modern commercial banks system perfect late,the contribution of commercial bank's non interest income to gross income is not high,Along with the further reform,the deeply reform of financial system,and the affects of factors such as financial disintermediation.It has been unable to maintain their profitability by relying on interest income.With the change of the management environment,commercial banks began to pay more attention to non-interest business,to set all kinds of non-interest business development strategies,to take various measures to promote the development of non-interest business.However,whether or not non-interest business can effectively improve the performance of commercial banks is still a problem which is worth of exploring and researching.In the context,this paper tries to find out the relations and the interdependence between the non-interest business and the income of commercial banks through the analysis of the data of China's commercial banks,and then providing beneficial references for banks in the process of development of non-interest business.In specific research methods,this paper selected five state-owned commercial banks and seven joint-equity commercial banks as research object,using the commercial bank's statistics from 2006 to 2014,which are appeared on the website and the national bureau.Through the establishment of panel data model,this paper has made empirical analysis on the relationship between the non-interest income and the performance of China's commercial banks.The conclusion is that,improving the proportion of the non-interest income of commercial banks has a positive effect on commercial bank's performance,whether it is state-owned commercial bank or joint-stock commercial banks.And the state-owned commercial banks' performance is better than thejoint-equity commercial banks'.The expansion of joint-stock commercial banks' non-interest income depends on the operating cost of the investment heavily,thus it is very difficult for joint-stock commercial banks to bring higher yields.To achieve higher profit growth,commercial banks should pay more attention to cost control when expanding non-interest income.