Research On The Determinants Of Net Interest Margin In China's Different Commercial Banks

Indirect financing is still the main financing method in China's financial system,so the efficiency of the banking system largely determines whether the financing channels of the real economy are unimpeded.Net interest margin is one of the important indicators to measure operating efficiency of commercial banks.At present,China's banking industry has formed a multi-level competition pattern,including large commercial Banks,joint-stock Banks,urban commercial banks,and rural commercial banks.It is of great significance to study the influencing factors of the net interest margin of different types of commercial Banks,for both the management of the net interest margin of commercial Banks and the improvement of intermediary efficiency.Firstly,this paper combed the domestic and foreign researches of commercial bank net interest margins,based on the H-S dealers model,three kinds of variables classified as micro,meso and macro are introduced to build the theoretical model of influencing factors for different types commercial Banks according to China's financial market,economy and monetary policy.Afterwards this paper focuses on the balanced panel data of 5 large banks,11 joint-stock banks,29 urban commercial banks,25 rural commercial banks,from 2009 to 2016.This paper inspect the influencing factors of net interest margins of different types commercial banks with a cross-section fixed effects model,used the method of GLS to estimate.From the regression results,the following conclusions can be drawn: the non-interest incomes have a significant negative effect on net interest margin of four types commercial Banks.But the degree of risk aversion and the market concentration rate pose positive effect.The cost factor will greatly reduce the level of net interest margin of the stock banks,the city commercial banks and the rural commercial banks,however,it has no significant impact on the large banks.Credit risk,interest rate risk and capital adequacy ratio only affect large banks greatly,which proves that large banks perform better in risk measurement and pricing.Furthermore,the increase of broad money supply significantly reduces the net interest margin of commercial banks except rural commercial banks.Finally,based on the empirical research,this paper puts forward some policy suggestions to the whole banking industry and different types of commercial Banks about how to improve the operating efficiency.