The Effect Of Non-interest Income On Risk Of Listed Commercial Banks In China

Recently,since the pace of interest rate marketization is accelerating and social financing needs is diversification,for commercial banks,the profit of the traditional deposit and loan business is squeezed.Chinese commercial banks actively expand non-interest business,to seek additional profit,in order to achieve the goal of steady growth.While the expansion of non-interest business has brought additional profit to commercial banks,commercial banks should also pay attention to the risk caused by the development of non-interest business.This paper firstly reviews foreign and domestic literatures on non-interest income,and defines the concept of non-interest income,then introduces the background and development status of non-interest income business in China.In the next part,this paper analyzes risk transmission mechanism between non-interest business and risks.At last,this paper establish regression models and use the panel data between 2007 to 2015 of the 24 listed commercial banks,in order to examine the impact of non-interest income on bank risk.The following conclusions are drawn:(1)The increase in the proportion of non-interest income can significantly reduce the risk of commercial banks;(2)The increase of the fee and commission income can significantly reduce the risk of commercial banks.The increase of the investment income can significantly increase the bank risk.The increase of other non-interest income can significantly reduce the risk of commercial banks.The empirical results are based on the fact that the fee and commission business are often dependent on the accumulation of customer resources and channels in the traditional business.They occupy less capital and have more types.According to the theory of portfolio,they can reduce bank risk.Investment income depends on the trend of the entire market to a large extent,and also with a high leverage,increases the level of commercial banks risk.Finally,considering the conclusions,this paper raises that Chinese listed commercial banks should optimize the internal structure of non-interest income business,maintain the development level of the fee and commission income,develop the investment business rationally and strengthen the risk control.