Normative Analysis And Empirical Study On Influencing Factors Of Commercial Bank Profitability In China

The profitability of commercial banks is an important indicator to measure the competitiveness of banks.Although bank profit keeps growing rapidly in China,the banking profit model dominated by the interest rate spread in China will face greater challenges under the implementation of the interest rate marketization and the impact of internet finance.October 24,2015,the People's Bank of China cancelled the regulation of floating interest rates for deposits,which means that the bank's interest rate liberalization has basically been completed.At present,all kinds of internet financial institutions carry out various wealth management services and microfinance business,which have a greater impact on the banking industry.How banks should meet these challenges and improve their profitability and competitiveness have always been the focus of the banker and the academic community.The analysis and study of the factors that influence the profitability of banks is an important topic of concern in the financial academic community.Only through the theoretical and empirical study of the logical relationship can the problem be solved in a timely manner.The third chapter combines the research ideas and methods of scholars at home and abroad,and conducts in-depth research on the profitability of commercial banks based on the theory of financial development and economic growth,theory of scale economy,theory of financial innovation and the theory of financial crisis,and conduct normative analysis on the factors that influence the profitability of banks.The factors includes macroeconomic environment factors,industry evelopment factors,bank size,quality,efficiency factors and so on.This analysis will pave the way for subsequent empirical analysis.The fourth chapter focuses on the comparative analysis of the profit indicators of state-owned commercial banks and joint-stock banks in the past ten years.In chapter five,empirical research was conducted by building a data panel model.Two dependent variables are selected for the model,such as the return on assets(ROA)and return on equity(ROE).Eight independent variables are selected for the model,such as asset size,capital adequacy ratio,non-performing loan ratio,non-interest income rotio,deposit/loan ratio,GDP growth rate and inflation rate.We selecte the 2005-2016 panel data of the 13 listed banks,and establish a panel data model to conduct empirical research on the factors that influence the profitability of the bank.In the empirical process,we use the F-test and Hausman test to ensure the most suitable panel data model.Finally the conclusion show that:the quality of bank assets,the rate of return on human investment and the rate of inflation have positive correlation to ROA and ROE;capital adequacy ratio also has a significant influenceon ROA and ROE,it is positively related to ROA,but is negative correlation to ROE.The deposit/loan ratio is negatively related to ROE,and has no significant influence on ROA;the total asset scale and GDP growth rate have significant negative correlation to ROA,and have no significant influence on ROE;the non-interest income rotio has no significant influence on the two factors..At the end of this chapter,according to the empirical conclusions and the actual development of the bank,we analyze and summarize the relationship between the two independent and the eight dependent variable indicators.Finally,on the basis of empirical research,this paper puts forward that at the present stage in China commercial banks face three main challenges for the profitability:First,the bank's interest rate spread continues to narrow;Second,the growth of bank debt is weak;Third,the asset quality of bank is still facing greater risk.According to the results of empirical analysis and the current situation of bank,we throw out four countermeasures:First,establish and improve the credit risk prevention mechanism;Second,vigorously carry out asset-light business through multiple channels to promote the development of middle business income;Third,establish professional talent team,create special products;Fourth,make full use of the Internet,huge data to increase financial innovation;fifth,strengthen research on the development of macro economy,region and industry,and formulat the development plan of the bank.