Analysis Of The Impact Of Interest Rate Changes On The Income Structure Of China's Commercial Banks

For long time,the income for China's commercial banks mainly came from the interest spreads of deposit and loan.Along with the interest rate marketization,the interest rates on deposits and loans have been narrowed,which made commercial banks' income and profits become unstable and highly dependent on the change of interest rate.To cope with the change,some of the commercial banks has started business model transformation,upgraded from a single income structure with interest income based on traditional deposit and loan operations to a balanced structure with the development of both interest and non-interest income business and thereby reduced the negative impact of changes in interest rates on financial performance to maximum extent.With marketization of interest rate as background,this article adopts a combination of theoretical and empirical analysis,based on a linear multiple regression model,and observes the relationship between short/long-term Shibor rate changes and non-interest income proportion of commercial banks' income as well as its impact on commercial banks' income structure in China.Last but not least,this article also provides suggestions on adjusting banks' own income structure based on interest rate changes to prevent the corresponding risk and efficient improvement of the non-interest income proportion.As research result,there is conspicuous impact brought by interest rate change to commercial banks' income structure.In the first place,non-interest income proportion increases while interest rate goes up and it decreases while interest rate goes down,which means they are following the same changing trend.Secondly,interest rate change brings lagging impact to commercial banks' income structure,which may be one or two quarters behind.Last but not least,by comparison,it is found that the impact brought by interest rate change varies to commercial banks of different scales.