Study On The Factors Affecting And Improvement Strategies Of Profitability Of Chinese City Commercial Banks

With China's economic growth slowed,interest rate marketization accelerated reform,and the trend of financial disintermediation is exacerbated,the economy is facing downward pressure,the profitability of commercial banks is facing severe challenges.Compared with other domestic banks,due to history,management capabilities,environmental and other reasons,the city commercial banks profitability there is a big gap.It is very theoretical and practical to study the factors that affect the profitability of city commercial banks and the degree of influence.The factors that affect the profitability of city commercial banks can be considered from microscopic and macroscopic perspective.This paper select asset size,loan-to-asset ratio,capital-to-asset ratio,non-interest income growth ratio,operating efficiency and non-performing loan ratio as microscopic influencing factors that affect profitability,select deposit market share,local economic growth rate and market demand diversification as macroscopic influencing factors that affect profitability.In order to verify the impact of various factors on the profitability of city commercial banks.Used the balance panel data from40 Chinese city commercial banks during the periods of 2009-2015,and empirical analysis the influencing factors of profitability of city commercial banks.The results of the paper shows that cost-to-income ratio,deposit market share,the local economic growth have significant positive impact on the profitability of the city commercial banks.Cost-to-income ratio and non-performing loan ratio have negative impact on the profitability of the city commercial banks.Based on the empirical conclusions,this paper discusses the corresponding strategies to improve the profitability of the city commercial banks from the five aspects of enhancing the capital strength,strengthening the cost and efficiency management,strengthening the credit risk management and adapting to the macroeconomic situation.This paper analyzes the influencing factors and promotion strategies of profitability of the bank of Lanzhou.