Research On The Relationship Between Scale And Performance Of Rural Cooperative Financial Institutions In The Background Of Share Reform

Rural commercial banks,as an important part of China's banking financial institutions,have become the main source of China's “agriculture,rural areas,and rural areas” credit funds,effectively solving the difficulties in financing and financing the development of “three rural issues” in China.Since the reform of the property rights system in 2003,rural credit cooperatives in Anhui Province have gradually begun restructuring their rural commercial banks.At the end of 2014,they have successfully completed the overall restructuring of 83 commercial banks to rural commercial banks,becoming the province that has taken the lead in completing comprehensive reforms in China.With the successful restructuring of rural credit cooperatives to rural commercial banks,their property rights have become clearer,the ownership structure has been gradually optimized,business scale has been expanded,business development has continued to diversify,and the ability to serve “agriculture,rural areas and farmers” has continued to increase.This has strongly supported the local economy.However,it is of great significance for the future development of rural commercial banks in Anhui Province to determine the effectiveness of the reform and whether the expansion of rural commercial banks after the reform will really benefit the performance of rural commercial banks.Therefore,under the current background of share reform,it is urgent to study the relationship between the scale and performance of rural commercial banks before and after the share reform.This paper first systematically reviews the history of the share reform of rural credit cooperatives,and analyzes in detail the development of the scale and performance of rural commercial banks in Anhui after the share reform.Secondly,on the basis of surveys conducted by 83 rural cooperatives under the jurisdiction of Anhui Provincial Rural Credit Cooperatives,data on total assets,capital profitability,and non-performing loan ratios of 83 banks from 2010 to 2017 were obtained using panel data fixed-effect models.An empirical study was conducted on the operating scale and operating performance of rural commercial banks in Anhui Province.The study found that there was a positive correlation between asset size expansion and cumulative net profit of the entire sample of rural commercial banks;and the scale of operation of rural commercial banks prior to comprehensive reform was positively correlated with cumulative net profit.There is no impact on the profit rate of assets and the profit rate of capital;after the overall restructuring,the profit rate of assets of rural commercial banks is negatively correlated with the expansion of business scale,and there is no impact on the capital profit rate and cumulative net profit.Through the above studies,this article believes that after the comprehensive reform of the banking agency in Anhui Province,the speed of its operation and management and risk control capabilities has not fully matched the speed of its scale expansion,and even to some extent its excessive expansion has damaged its operating performance.Therefore,rural commercial banks should maintain a reasonable rate of scale expansion,and put forward targeted proposals such as optimizing the ownership structure,improving corporate governance mechanisms,establishing effective incentive mechanisms,clearly positioning,and strengthening risk management and control,and improving the operation of rural commercial banks by solving the above problems.The management and risk control capabilities will in turn improve their business performance,so as to better serve the “three rural” business in Anhui Province.