Study On The Effect Of Non-interest Income On The Performance Of Listed Commercial Banks

For commercial banks,the three main income parts are from the asset business,the debt business and the intermediate business.So far,for the future development of commercial banks,the commercial banks themselves will face greater volatility due to the pressure of market competition and regulatory environment since 1990.Faced with these changes,all kinds of commercial banks should make corresponding countermeasures.The income structure with interest income must be adjusted.We need to expand and develop non interest income businesses and increase the proportion of non interest income in operating revenue.European and American commercial banks have diversified and integrated operation of investment banking,securities brokerage,insurance broking,fund sales and other businesses,making non interest income unprecedented development.Compared with western commercial banks,the contribution of non interest income in business revenue is low due to the lag of modern banking system in domestic banking industry.Since the reform and opening up,the financial system reform has been deepened,with its consequent effects on many aspects,such as interest rate liberalization,financial disintermediation,Internet banking,these factors imply that the only interest income business can not meet before the profitability.In order to cope with the brutal business environment competition,all commercial banks are concerned about non interest businesses,and develop non interest businesses through multiple strategies and measures,so as to achieve the increase of non interest business.However,although the development of non interest business will increase revenue for commercial banks,but the commercial banks in the non interest business,have to consider the cost,because the corresponding cost will offset a portion of non interest income,and some characteristics of non interest income and high risk.Therefore,to improve the performance of commercial banks,whether the non interest business can play a key role is still the subject of the need to study.After a brief analysis of the development background of non interest income,this article discusses whether the non interest income can play a role in promoting the performance of China's listed commercial banks from two aspects: theoretical analysis and empirical research.First,there are four theories mentioned in the article to support the feasibility of non interest income business of commercial banks,including the first one is the theory of scope economy,the second is the theory of diversification,third is the theory of financial innovation,and the fourth is the theory of financial freedom.Then,this paper makes the statistical analysis on the collected data in the annual reports of commercial banks,selected three kinds of banks,including large commercial banks,joint-stock commercial banks and city commercial banks,establish panel data model and the individual fixed effect model to carry out empirical research,obtained the following results: for the large commercial banks and joint-stock commercial banks and the city commercial banks,the proportion of non interest income increase will bring positive effect to the performance of commercial banks,the results also show that the non interest income of joint-stock commercial banks and city commercial banks accounted for on bank performance contribution is lower than the large commercial banks non interest income ratio influences the performance of commercial bank.The author analyzes the causes of this result may be:(1)in the number of customers,large commercial banks have an inherent advantage,and the number of personnel for the other two groups also cannot compete with banks,and for investment in equipment on the basis of an advantage,because of the non interest income of large commercial banks the cost of natural than the other two types of banks is much lower.(2)because of the large commercial banks to implement prudent development strategy in the development of non interest business,resulting in more traditional sources of non interest income,which mainly comes from the Commission and fee income etc.These have a low risk of business types;however,joint-stock commercial banks and city commercial banks more radical,to carry out investment banking,custody the business has a high risk of non interest income business types.In short,if commercial banks want to develop non interest income businesses,they must strictly control costs and pay attention to risk control.Only in this way can they have a positive impact on their business performance.