Research On The Impact Of Capital Structure On Credit Risk In Commercial Banks

Commercial banks play an important role in China's financial industry,and their development can drive economic development.With the increasingly complex financial environment,the risks faced by China's commercial banks are also increasingly complex and changeable.Credit risk is still the most important risk that banks face.In recent years,with the structural reforms on the supply side stepping into deep water areas,and the deepening of macroeconomic operations and structural adjustments,the overall profitability of China's commercial banks has been decelerating,the growth rate of nonperforming asset balances has remained high,and the pressure on asset quality has continued to increase.The non-performing loan rate showed an overall upward trend,indicating that the commercial bank credit risk has continued to accumulate.At the same time,the capital structure of China's commercial banks is constantly changing.Banking regulators have imposed higher requirements on capital supervision of commercial banks.Strengthening capital structure supervision can fundamentally enhance banks' ability to guard against risks.Therefore,facing an increased NPL ratio,banks need to optimize the internal structure of the capital structure so as to reduce credit risk and enable banks to achieve high-efficiency operations.Based on the above research background,this paper analyzes the capital structure of commercial banks from two perspectives.One is corporate finance perspective,which refers to the ratio of debt to owner's equity,and the selection of asset-liability ratio represents capital structure.The other is the perspective of capital supervision.According to the Basel New Capital Accord III,bank capital is divided into tier 1 capital and tier 2 capital,and banks have higher regulatory requirements for capital adequacy.Therefore,a basic analysis of the capital structure of commercial banks is conducted from the ratio between Tier 1 and Tier 2 capital,the first-tier capital structure and second-tier capital structure and capital adequacy.In the first-tier capital structure,the ownership structure is the focus of the analysis of capital structure.This paper theoretically analyzes the impact mechanism of commercial bank's capital structure on credit risk and puts forward related assumptions.At the same time,it analyzes the status quo and existing problems of 16 A-share listed banks' representative capital structure and credit risk related indicators in 2016.Based on the theoretical analysis,this paper selects 16 A-share listed commercial banks in China from 2007 to 2016 as the sample,first selects five indicators including non-performing loan ratio and single customer's maximum loan ratio,and adopts principal component analysis to construct the comprehensive credit risk of representative banks.Followed by this indicator to represent credit risk and selects explanatory variables representing the capital structure from two perspectives,including asset-liability ratio,capital adequacy ratio,proportion of primary capital,proportion of secondary capital,and relevant indicators of equity structure in Tier 1 capital.Then through panel regression analysis of the impact of capital structure on credit risk and demonstrated that the ratio of assets and liabilities,the proportion of tier 1capital,the proportion of shares held by the largest shareholder,the proportion of state-owned shares and the credit risk are significantly positively correlated.The capital adequacy ratio,the proportion of secondary capital,the shareholding ratio of the top ten shareholders,the ratio of circulating shares and credit risk were significantly negatively correlated.Finally,combining the status quo of the capital structure of commercial banks and the empirical conclusions,from the perspectives of corporate finance and capital supervision,the author proposes the countermeasures to reduce the credit risk of commercial banks in China.