Financial Analysis Of City Commercial Banks Based On Camel Evaluation System

Bank's financial situation reflects the level of operation and management,and it is embodiment of bank's comprehensive strength.Good financial situation can provides stronger driving force to resist risk,gain profit,optimize capital structure,meanwhile,it's the essential factor to form competitiveness of the bank.In recent years,the external economic and financial environment of China's banking industry has changed profoundly,with the deceleration of economic growth,basical completion of interest rate marketization reform,acceleration of financial disintermediation and the rapid rise of internet finance.China's banking industry is facing unprecedent pressure.City commercial banks are important parts of China's banking industry.Over the past two decades,city commercial banks have played more and more important roles in China's banking industry and national economic development.Considering city commercial banks are relatively weak in asset scale,business structure,profitability and risk management ability compared to the large state-owned commercial banks and national joint-stock commercial banks,it's no doubt that city commercial banks are facing more severe pressure under current external environment.Therefore,it's necessary and significant to analyze and evaluate city commercial banks' financial situation.This article intends to analyze and evaluate city commercial banks' financial situation by constructing a set of bank's financial situation evaluation system,and to give corresponding suggestions according to the analysis results.The framework of this article is:Firstly,summarizes the conclusion after analyzing relevant research at home and abroad that:Bank's financial situation evaluation is closely associated with banking rating,bank's financial situation evaluation is the foundation of banking rating,and banking rating system gives reference for constructing financial strength evaluation system.Secondly,introduces the history and current external environment and financial situation of city commercial banks.Thirdly,constructs bank's financial situation evaluation system on the basis of camel evaluation system,which is the most representative banking rating system.Based on camel evaluation system,adds growth evaluation factor to evaluate growth of asset scale and profit,adds innovation evaluation factor to evaluate business innovation ability that develop intermediary business,thus constructs bank's financial situation evaluation system that includes 7 factors: capital adequacy,asset quality,management ability,earning capacity,liquidity,growth,business innovation ability,and there are 10 specific financial indicators under these 7 factors.Next,selects 9 city commercial banks as sample banks.Analyzes and evaluates sample banks' financial situation based on the financial situation evaluation system,with the financial data of 2015 as the main analysis objects.Finally,in view of the analysis and evaluation,puts forward corresponding suggestions in order to promote city commercial banks' financial situation.The process of sample banks analysis consists of 3 parts:First of all,analyzes and compares performances of sample banks on 10 specific financial indicators,and then sums up characteristics of the financial performances of sample banks.Secondly,conducts empirical analysis using principal components analysis.Derives four principal components(principal component of operation and management efficiency,principal component of safety and liquidity,principal component of growth,principal component of business innovation ability)from the original financial indicators,works out the scores and ranks of sample banks according to the performances on the four principal components,then analyzes and evaluates sample banks' financial situation based on the scores and ranks.Thirdly,takes Great Wall West China Bank as an example,analyzes its performance on 10 specific financial indicators,evaluates its score and rank,after that,summarizes its financial defects.