Profitability Evaluation Of Hua Xia Bank Based On RAROC

Since the implementation of the regulations of the People's Republic of China on the administration of foreign Banks in 2006,China's financial system has been fully open to foreign countries,and foreign Banks have rushed into China and occupied the Chinese market,bringing great impact to Chinese commercial Banks.As a representative of medium-and small-sized joint-stock Banks,HUAXIA bank is an important part of China's commercial Banks,how to reduce the risk of its bank,control the expected loss and improve the bank's own comprehensive profitability is increasingly important.This paper took the panel data of 16 listed Banks in China from 2012 to 2017 as the research object,selected important financial indicators and highlighted the RAROC indicators to rebuild the new profitability system.New system of profitability will be the main force ability index screening for the index system is divided into three levels,first level for the financial and non-financial indicators,the second level is divided into effectiveness index,liquidity index,competition ability,innovation ability,risk management ability index,return ability index and growth index.The third level is specific to each index.The efficiency capacity includes: RAROC,return on assets,cost income ratio,net profit margin.Liquidity includes: loan-to-deposit ratio.Competitiveness includes: net interest rate.Innovation capability includes: non-interest rate of return,commission and commission income share.Risk management capabilities include: RAROC,non-performing loan ratio,capital adequacy ratio.Return capacity includes return on equity.Growth includes: net profit growth rate.Market share includes: deposit balance ratio.Company size includes: asset size.Business outlets include: total number of outlets account for a proportion.In the new profitability system,the analytic hierarchy process(AHP)is used to assign the corresponding weights to each index and rank them,so as to obtain the most appropriate and practical ranking results.In ranking results can see at a glance of HUAXIA bank index at all levels and the overall ranking,based on the key research HUAXIA bank ranking position,and carry on careful analysis,found the problems of HUAXIA bank,according to the actual situation of HUAXIA bank gives the corresponding countermeasures and Suggestions,and raise the overall profitability of HUAXIA bank.