A Study On The Relationship Between Non-interest Income And The Performance Of Commercial Banks

China is deepening the reform of financial market and establishing a multilevel financial market system gradually.Direct financing will soon play a more important role.The multiple effects of interest rates marketization and internet finance have forced commercial banks to turn to integrated operations.It need to provide diversified financial products and services to satisfy all kinds of requests,such as investment banking,wealth management and alternative investment services.This article describes the related concepts and theories after reviewing the literature.And then it introduces the current situation of the non-interest income development of China's commercial banks,including the total amount of non-interest income,and the proportion of the non-interest income and its internal composition.Then this article points out its constraints in the development.Finally,after analyzing the impact of non-interest income on the business performance of commercial banks,the paper discusses the specific impact on bank performance from the point of the scope of business and composition of non-interest income.The empirical analysis is based on the data of 19 listed commercial Banks in China from 2008 to 2016 and establish panel data model to observe the effects of non-interest income on banks' performance.Banks in the model are divided into state-owned Banks,joint-stock commercial Banks,and urban commercial Banks.The explained variables include profitability index-total return on capital,risk level index Z values and risk-adjusted yield of S.This paper interprets the proportion of non-interest income and its five main components as explanatory variables.It also chooses bank assets,owners' equity ratio and non-performing loan ratio,etc.as control variables to study the effects of overall non-interest income and its components on these three types of banks' performance.After analyzing the empirical regression results,the conclusions are drawn and relevant policy suggestions are given.These suggestions include increasing innovation and taking a differentiated path,strengthening risk management and reducing operational risks,optimizing human resources to form scale effect.