The Influence Of Non-interest Income On Commercial Banks' Business Performance Under The Background Of Marketization

Interest business has been the main business of Chinese commercial banks for a long time,and most commercial banks mainly rely on spread income to survive and to generate revenue.However,in addition to the traditional spread income,the banks also offer the clients a range of financial services for a fee,and in order to distinguish from the interest income,this part of the revenue was collectively referred to the non-interest income.But these services are mostly based on traditional deposit and lending business,they have only gotten a slow pace of development,and not been taken into consideration by commercial banks seriously.However,since seventies and eighties of the 20th century,the international financial environment has changed dramatically.The Bretton Woods system has collapsed,the interest rate market has been promoted continuously,which leads to the continuous fluctuation of market interest and international exchange rates.The appearance of financial disintermediation phenomenon has promoted the changes in the structure of financial markets,the earnings that the commercial banks obtained from the traditional deposit and lending business has continuously reduced,so we must develop new business to compensate for the loss of traditional business.The prevalence of financial liberalization,the entrance of private capital and foreign capital has intensified the competitive pressure on domestic banks.The advances in computer technology has promoted the development of internet finance,which further urged the commercial banks to develop non-interest business on a large scale as well as to seek new sources of profit.Under such a context,this paper tries to explore the specific relationship between the non-interest income and the operating performance of commercial banks.Firstly,this paper led to the topic and then proposed the purpose,significance,research methods and content of the paper.Secondly,it described the basis of the banks to expand non-interest income and the previous research achievements,and gave the literature review.Thirdly,this paper described and summarized the pressure that the national commercial banks operating currently face and the present situation of non-interest income,which lay the groundwork for the empirical part.Finally,in the empirical part,this paper used the related financial data from 2005 to 2014 of 16 listed banks,builds the model by selecting the appropriate variables.In order to conduct empirical analysis,this paper used ROE as the indicators for measuring the bank's operating performance,and then put the factors that have impacts on the performance of banks,including NIIR,into the model.According to the regression results,the non-interest income of state-owned banks and operating performance were positively correlated,while the non-interest income of the joint-stock banks was negatively correlated with their operating performance.In addition,this paper explored that the difference was mainly due to the higher costs that joint-stock banks have paid when conducting non-interest business.At last,this paper puts forward valuable recommendations according to the empirical results,including strengthening the dominant position of fee and commission income as well as improving the constitution of their source;using the existing customer base and sales network to expand non-interest business;forming a strategic cooperation alliance with non-bank financial institutions so as to complement advantages;promoting product innovation;creating product features,service features and characteristics of the brand;vigorously develop online banking and mobile banking and so on.