The Study On The Impact Of The Inter-bank Business Of City Commercial Banks On Their Operating Performance

In recent years,city commercial banks develops rapidly and their total assets continues to expand.However,the expansion rate is slowing.The growth rate of after-tax profits is higher than the growth rate of the banking industry as a whole.The growth rate of net profits drops markedly.The stability of profit growth in commercial banking income is hard to achieve.Although the overall NPL ratio of city commercial banks is lower than that of banking financial institutions,both the NPL ratio and balances have shown an upward trend,while asset quality is declining.City commercial banks are playing a more and more important role in the financial field and are playing an increasing important role among financial institutions.However,under the dilemma of narrowing interest margin of basic business,the development of city commercial banks is challenged and hope to seek new profit growth point.With its own advantages,the inter-bank business is welcomed and became the new source of banking income.In the earlier period,the city commercial bank's inter-bank business grew at a faster pace,the business scale continued to expand,and the urban commercial bank's development of inter-bank business was more aggressive.In order to standardize the development of inter-bank business,the government successively carried out important documents to help promote the inter-bank business to shift from extensive model to innovation model and seek for development on asset and liability.Inter-bank business of city commercial banks is turning from the quick development in earlier stage to pullback.In the initial period of the development of inter-bank business,the inter-bank business continued to generate revenue for the city commercial banks,which positively promoted the improvement of their operating performance levels.However,with the continuous development of the inter-bank business,the scale of the business continues to expand,and whether the inter-bank business has improved the operational performance of the city's commercial banks.Thus,It is realistic and necessary to study the effect of the inter-bank business of city commercial banks on their operating performance.Based on the theoretical analysis of the existing status,this thesis makes an empirical study on the operating performance of the inter-bank business of city commercial banks by constructing dynamic panel model.The results show that the inter-bank business has an impetus on the improvement of the operating performance of city commercial banks.However,such improvement is not durative.After the inter-bank business reached a certain scale,there will be in infection point in the operating performance of the city commercial banks.This kind of unsustainability in stimulating the operating performance of inter-bank business lies in both the asset-side and the liability side.Both the proportion of inter-bank assets and the proportion of inter-bank liabilities have an inverted "U" effect on the operating performance of city commercial banks.Depositing,the lending and borrowing,buying and returning business of the inter-bank assets have a positive effect on business performance of city commercial banks.Inter-bank deposits in inter-bank liabilities have a positive effect on their business performance,while the liquidation of fund,buying and returning business of the inter-bank assets perform a negative effect on their operating performance.Based on the above analysis,in order to promote healthy and sustainable development of the inter-bank business of the city commercial banks,a series of measures should be taken as follows.First,inter-bank business volume has to be under control,and the proportion should be handled within a reasonable range.Guide small and medium-sized banks,seek balance between basic business and inter-bank business,and return to the origin of their deposit and loan business.Second,measures should be taken to optimize the inter-bank business structure and limit the increase of business structure while promoting the development of business transformation.We will strengthen the control over basic assets,limit the final investment in some non-standard assets,and reduce the risk concentration of banks in high-risk areas.Third,supervision of inter-bank business should be strengthened and return to a prudential regulatory framework.Fourth,inter-bank business should return back to basics,and perform liquidity management.