A Study On The Influencing Factors Of Commercial Banks' Non-performing Loan

Since the 21^st century,with the continuous development and reformation of Chinese financial industry.The problem of Chinese banks'non-performing loans has been better resolved.However,both of amount of non-performing loans and non-performing loan ratio have risen since 2012.The problem of non-performing loans not only threatens the safety,liquidity and profitability of commercial banks,but also the stability of the entire financial system.This paper will find out the factors which will affect the non-performing loan ratio of commercial banks,which is of practical significance to prevent the problem of non-performing loans.Firstly,this article introduces the domestic and foreign research results,and finds that the factors that affect the non-performing loans are divided into macro and micro aspects.Secondly,on the basis of the related theories and the current situation of China's non-performing loans,it analyzes the impact of macroeconomic and microeconomic factors on non-performing loans from a theoretical point of view.Thirdly,according to the above theoretical analysis,this paper chooses quarterly data from 10 listed banks and related macroeconomic variables during 2009 first quarter to 2016 third quarter,and take an empirical analysis of factors affecting the bank's non-performing loans.Then it chooses the non-performing ratio as the dependent variable and establishs two panel regression models.In the first step,it find out the factors which have significant impact on commercial banks'non-performing loan ratio.In the second step,it adds cross-items to panel regression model to verify that whether the size of the bank will affect the impact of macroeconomic fluctuations on the bank's non-performing loans.Finally,this article gets main conclusions as follows:?1?The speed of economic growth is negatively correlated to non-performing loan ratio.The interest rate is negatively correlated to non-performing loan ratio.The impact of the greater added value of M2 on non-performing loans has a certain lag,the greater added value of M2,the higher non-performing loan ratio in the future?2?Bank's return of asset?ROA?,provision coverage and net interest difference are negatively correlated to non-performing loan ratio,and the size of bank is positively related to non-performing loan ratio.?3?The impact of GDP growth rate will be greater on larger size banks than the smaller.However,the larger size banks can deal with change in interest rate better.But smaller bank can not control credit risk well,the change of interest rate has a greater impact on the non-performing loan ratio of small banks.According to the result of empirical research and actual situation of China's banking industry,this paper put forward the proposal of preventing non-performing loans.