The Effect Research Of Non-interest Income On The Performance Of Commercial Banks

With the deepening of China's market-oriented interest rate reform,capital market perfecting rapidly and financial innovation products emerging constantly,the traditional credit business of commercial bank received severe impact.Therefore,to broaden sources of income,the development of non-interest income has become the important strategy of Chinese banks.Interest income and non-interest income business has the very big difference.The former takes up less capital and has various types of business risk and income,with weak dependence on economy and strong demand for the bank's innovation ability.There is a certain degree of challenge for the operation and management of commercial banks.In addition,non-interest income business is affected by scale economy and scope economy.Non-interest income's effects on business performance may not be consistent between the different types of commercial bank.That is to say,the non-interest income's impact on the performance is nonlinear.This article aimed at studying the non-interest income's impact on the performance as the change of bank assets by using a threshold regression model proposed by Hansen.First,we introduce and summary the researches on the non-interest income's impact on the performance of commercial banks;Then,we introduce the concept of non-interest income and theoretical basis about non-interest income.Further,we introduce the development of non-interest income and the transmission mechanism of the performance of commercial banks.At last,we carried on an empirical research to study the relationship between non-interest income and the performance of commercial banks.The empirical results show that when the bank scale is less than 334.2 billion,non-interest income has no significant impact on performance,when the bank scale is between 3342 and 3.709 trillion,non-interest income has a positive effect on performance,and when to rise between 37090 and 5.71 trillion,positive influence is reduced,when the bank scale is more than 5.71 trillion,further reduce happens.We conclude that non-interest income's positive effect become more and more important accounted for the change of commercial banks' scale.But with the further expansion of the scale,the effect has a weakening trend.We also studied the influence of various components of non-interest income.Among them,the fee and commission income has the most obvious effect,and the influence is approximately the same with non-interest income.Further we subdivided the fee and commission income into self-operated business and the entrusted agency business.Both have obvious threshold effect,but proprietary business has a negative effect on performance of commercial bank,and entrusted agency business has a diminishing positive effect when the scale reaches a certain level.Most of previous research will be subjective classification and study on the linear effect of non-interest income on bank performance.According to the basic theory of scale economy and scope economy,this article study the nonlinear influence of non-interest income on banks' performance with the bank scale as threshold variable.The results also prove that non-interest income and its important part have a nonlinear effect on bank performance indeed.