The Effect Of Non-interest Income On Revenue And Risk Of Listed Commercial Banks In China

Nowadays,as the entry of foreign bank,the rise of Internet banking and private bank,Interest rate liberalization,which have resulted in huge changes in the operating environment of china's commercial banks.Due to the gradually shrinking of traditional loan-deposit spreads of commercial banks,the profitability become worrying.Merchant must change developmental pattern to seek profit-making point in addition to traditional services.So non-interest services will become the key issues of expioring.However,domestic and overseas scholars hold different views on the effect of non-interest income on revenue and risk.Based on the actual situation of china's commercial banks business,the thesis will make empirical study to prove the effect of non-interest income on revenue and risk,trying to clarify their relationship and providing guidance for diversification,profitable improvement and risk reduction from theory and practice.Firstly this paper combed the research achievements of the effect of non-interest income on revenue and risk from country to country,and minutely introduced the non-interest operations composing and correlation theory.Secondly,the thesis expatiates the researching statue of non-interest business of merchant banks of our country.On the basis of the analysis,commercial banks are divided into state-owned bank,joint-stock bank,city commercial bank.Finally,through constructing the multivariate linear regression model to analyze the effect of non-interest income on revenue and risk under the data between 2008 and 2015.The empirical results show four conclusions.Firstly,for domestic commercial banks,non-interest operations could significantly improve the banks' earnings and risk-adjusted revenue,and this effect mainly stem from fee and commission income.Moreover,fair value also be valuable in facilitate gains.But the role is a bit weak.Besides,non-interest operations could significantly reduce the risk of banks,which mainly be attributed to fee and commission income.But the decrease in fair value is too weak in terms of fee and commission income.Secondly,for state-owned bank,the development of non-interest operations has a direct positive effect on revenue and risk-adjusted yield,which are originated from fee and commission income.And non-interest business has no significant effect on the risk ofChina's state-owned banks.Thirdly,for joint-stock bank,the development of non-interest business has no remarkable impact on the revenue and risk-adjusted revenue,and also has no significant effect on the risk.But other business income,to a certain extent,improve the revenue of joint-stock commercial banks and risk-adjusted revenue.Fourthly,for city commercial bank,the development of non-interest income has no notable effect on the revenue,risk-adjusted revenue and risk.Fee and commission income reduces the revenue and risk-adjusted revenue,but increases the risk of city commercial bank.Besides,fair value gains enhance the income of city commercial bank and reduces the risk of the bank,while other business income reduce the bank's revenue and increase risk.