Huishang Bank Profitability Research Based On Du Pont Analysis

In modern society economy,commercial banks are important financial service institutions.As our country's foreign policy is open,the process of financial internationalization is accelerating,and banks in our country have been opening.The continuous opening of banking industry has brought great pressure to our commercial bank in China,especially regional joint-stock commercial banks.Facing the challenges,the survival and development of Chinses commercial banks need the promotion of their own comprehensive strength and competitiveness,which are both base on profitability.Profit maximization is the fundamental goal in the survival and development of enterprises.With the same as enterprises,listed commercial banks are also pursing profit increasing.In recent years,rapid growth was acquired in all aspects from Chinese regional joint-stock commercial banks,such as business operations.Their function in accelerating the development process of our China's financial system become more apparent.Meanwhile in an increasingly competitive banking market,regional commercial banks,which promote the development of city economy,are now facing two big competitors that are foreign banks and state-owned commercial banks with financial strength.It is key to regional commercial banks That making use of their own advantage and reducing the business risk for differentiated competition,it is key to the survival and development of regional commercial banks.To improve market competitiveness,they need enhance their profitability.In this paper,Huishang Bank,one listed regional commercial in China,was selected as research object.To analyze and evaluate its profitability systematically,on the basis of analysis of its annual report data in recent four or five years,DuPont's analysis was applied to calculate and decompose its important financial indicators.First,with the intention of knowing the effect on comprehensive benefits,which were brought by its income and cost,the rate of return on equity was analyzed and decomposed.According to its data trend in recent four years,profitability sustainability and future trends were analyzed.Then to gain the differences among the financial indicators,which effected profitability,related financial indicators of national joint-stock commercial banks,such as China merchants bank,China industrial bank,China everbright bank,and Huishang bank,were analyzed and compared.The same analysis and comparison were also conducted among regional commercial banks,such as Bank of Nanjing,Bank of Beijing,Bank of Ningbo and Huishang Bank.At last,internal and external factors that affected Huishang bank profitability were analyzed,to put forward solutions concerned about existing problems in profitability.For the limitation of DuPont's analysis in commercial banks' profitability,credit risk management's effect on profitability were evaluated,and according countermeasures and suggestions were offered.The results of this paper may provide some useful references for regional commercial banks to improve their profitability and comprehensive competitiveness...