Analysis On The Impact Of Non-interest Income On The Business Performance Of Commercial Banks

In recent years,the advancement of marketization of interest rates,the gradual deepening of financial disintermediation and the rapid development of Internet finance have made the competition among banks in China more intensified,which have caused great impact on the ability of banks to create profit by relying on the traditional deposit and loan business.Therefore,getting rid of the single profit model and vigorously developing non-interest income business have become an important part of the transformation of commercial bank's business strategy.However,the development of non-interest income business will not only bring positive effects on the diversification of income sources to banks,but also have negative effects on the expansion of expenses and risks.The relationship between non-interest income and bank performance is uncertain,many banks are concerned about actively expanding non-interest income business.Therefore,this paper hopes to clarify the relationship between non-interest income and bank operating performance through relevant theoretical analysis and empirical research,so as to provide suggestions of developing non-interest income business reasonably for commercial banks in our country.Based on the annual data of 80 commercial banks in our country from 2009 to 2016,this paper empirically analyze the impact of total non-interest income and its structure on the performance of the overall sample banks and the four types of commercial banks respectively through establishing panel data regression models,the results show that: From the perspective of total non-interest income,increasing the proportion of non-interest income can make the operating performance of the overall sample banks,state-run and joint-equity commercial banks significantly improved,but it will significantly reduce the operating performance of city commercial banks and rural commercial banks.From the perspective of non-interest income's structure,the proportion of net fee and commission income were significantly positively correlated with the operating performance of the overall sample banks,state-run and joint-equity commercial banks,it were significantly negatively correlated with the operating performance of city commercial banks and rural commercial banks.The proportionof investment gains and losses has significant positive impact on the operating performance of state-owned commercial banks,it has significant negative impact on the operating performance of the overall sample banks,joint-stock commercial banks and city commercial banks.The proportion of gains and losses from changes in fair value is significantly negatively related to the operating performance of state-owned commercial banks and rural commercial banks.There is no significant relationship between the proportion of exchange profit and loss and the operating performance of all types of banks.The proportion of other business income has significant negative effects on the operating performance of state-owned commercial banks.In order to develop non-interest income business better,this paper proposes that commercial banks should optimize the internal structure of non-interest income reasonably,strengthen cost control and risk management,different banks develop non-interest income business differently,and other suggestions.