Does The Income Structure Of Commercial Banks Affect Company Value

Commercial banks are an important part of China’s national economy.In recent years,asset scale has been growing.At the same time,the development and transformation of commercial banks in China has attracted the attention of both theorists and practitioners.In the field of practice,with interest rate marketization and the deepening of RMB internationalization in recent years,as the main body of the market economy in China,the products and services of commercial banks have been constantly emerging to cope with the rapidly changing market demand and the increasingly fierce market competition environment.In the academic field,previous domestic scholars mainly focus on the non interest income part of the commercial banks in China,mainly studying the influence of non interest income on commercial banks’ financial performance,market performance,business risk and other aspects,but less research on interest income in commercial banks in China,and lack of empirical test.According to the data disclosed by the China Banking Regulatory Commission,the interest income of 16 listed commercial banks in China accounted for 77.35%of the commercial bank’s income by the end of 2017.Thus,for commercial banks in China,interest income still occupies the dominant position in commercial bank income,and interest income is far higher than non interest income,which also embodies the importance and necessity of interest income research for commercial banks in China.From the definition,the interest income of commercial banks mainly includes all kinds of loans issued(company loan business,personal loan business,etc.),and other financial institutions(central bank,the same industry,etc.)between financial transactions,buy back sale of financial assets and other interest income.The highest proportion of interest income in commercial banks is interest income and interest income of personal loans.Corporate loans and personal loans are the two most basic types of business of commercial banks.The two are mainly the following five differences:first,the subject of loan is the company and enterprise,and the object of the loan is individual;secondly,the scale is different,the scale of the loan is usually large and the size of the individual loan is small;again,the term is different,the company loan is different.Short term loans with a period of one year and less than one year,less medium and long term loans,and longer term of personal loans,with housing mortgage loans as an example,affected by relevant policies,the longest loan period can reach 30 years;again,due to the different period of time,the benchmark interest rate of the loan is different,the individual loan has a higher loan interest rate for a longer period of time;finally,because of the company’s loan scale,High,such as forming bad loans and triggering high losses,has great influence on the performance of commercial banks.For a commercial bank,the total size of the loan is relatively fixed in a certain period,influenced by the ratio of the central bank’s deposit reserve and the ratio of the deposit and loan.In recent years,under the premise of the total loan scale,how to distribute and manipulate the company loans and personal loans is a problem worth discussing in both the practical and theoretical circles.From the angle of loan interest income,does the structural change of the interest income of the company and the interest income of the individual loan affect the financial performance and the market performance of the commercial banks?If it is found from the empirical point of view that the interest income structure of the commercial bank is related to the value of the listed commercial banks in China,the adjustment of the loan income structure and the scale structure of the loan will be adjusted from the empirical point of view,and the empirical test will be provided for the transformation and development of the commercial banks in China.On the basis of the financial data of the listed commercial banks and the value data of the company,this paper explores the influence of the interest income of the commercial banks in China on the financial data and the market value,based on the theoretical explanation and the empirical test.In this paper,three key explanatory variables are introduced to investigate the interest income structure of commercial banks:the proportion of the interest income of the company to the proportion of the company’s income,the proportion of the interest income of the individual loan to the company’s income,the proportion of the interest income of the company and the interest income of the individual loan.We measure the financial performance of China’s listed commercial banks by return on assets(ROA)and return on net assets(ROE)of commercial banks.Tobin’s Q value is used to measure the market performance of China’s listed commercial banks.The factors such as company size,debt ratio,and years of establishment are set as other variables.By building a model,we study the impact of interest income structure of 16 listed commercial banks on company value.The study found that the proportion of interest income of commercial banks in China has a significant negative correlation with corporate asset returns,net asset returns and the value of Tobin Q,while the proportion of personal loan interest income has a significant positive correlation with corporate asset returns,net asset returns and Tobin’s Q value;the proportion of corporate loan interest income and personal loan interest income and the rate of return on corporate assets There is a significant negative correlation between net asset yield and Tobin Q value.This indicates that commercial banks with higher personal loan interest income usually have better financial performance and higher market value.This paper holds that it is of great significance to optimize the interest income structure of commercial banks.The government departments,the regulatory departments and the decision-makers of commercial banks should strengthen their efforts to optimize the income structure of commercial banks in order to serve the market economy of our country.