Research On The Influence Of Income Diversification On The Performance Of China's Commercial Banks

At present,the internal and external environment of China's commercial banks are changing rapidly.The financial reform has been continuously promoted,the finance gets deepening,the Internet finance gets continuous development and the competition among different banks gets gradual intensive.In particular,with the finish of the interest rate liberalization,the interest spread is getting narrowed.At the same time,with the development of Internet finance,a large number of Internet financial products are constantly emerging,and those commercial banks who over-reliance on the traditional business also suffered some kind of impact.The loss of a large number of banks' high-quality customers has greatly affected the sources of funds for banks and the business performance has also received a great impact.This situation gives commercial banks higher requirements on the revenue diversification.However,at present,Income diversification development in China has been in a short time,its diversified level is relatively low and support for diversified development is relatively weak in related policies and laws and regulations.Therefore,we try to explore the impact of the income diversified development level on the performance of commercial banks of different nature.So as to provide reasonable suggestions for the commercial banks in our country and provide certain reference value for their future development.Based on the data of the listed banks in our country from 2009 to 2016,the paper selects 19 representative ones as sample,and according to the different systems,divides 19 banks into three groups: large state-controlled banks,medium-sized joint-stock banks and small city commercial bank.Based on the panel data regression model,we study the correlation between income structure and banks' performance.According to empirical result,it shows that diversification has a slight negative impact on performance.Specifically,it improved the performance of joint-stock banks,but reduced the performance of state-owned banks and city commercial banks.We think it is because of thecurrent wide spreads,diversification will have certain negative effects.However,due to the negative impact of spreads on performance,the narrowing of spreads will significantly reduce the banks' yield.Therefore,in the long run,the spread will shrink to a certain stage,and the advantages of diversification will emerge.Finally,combine with their business operation,we put forward corresponding proposals regards on the empirical results of different types of commercial banks.