An Empirical Study On The Benefit And Risk Effects Of Loan Concentration In Chinese Commercial Banks

The concentration of loans in commercial banks is a common economic phenomenon,manifested in that credit resources are concentrated in certain specific customers,industries and regions.Moderate concentration of loans has a positive impact on commercial banks' own risk control.However,excessive Loan concentration will have a negative impact on the development of commercial banks and the development of the economy as a whole.In order to study the status quo of loan concentration of commercial banks in our country and the impact of loan concentration on the profitability and risk of commercial banks,based on the data of 14 listed commercial banks in China from 2007 to 2016,this paper adopts a combination of research methods in quantitative analysis and qualitative analysis,normative analysis and empirical analysis.On the basis of summarizing the previous studies,this paper starts with the current situation of loan concentration in China's commercial banks,analyzes the customer concentration,industry concentration and regional concentration of China's commercial bank loans,and analyzes the loan concentration Income and risk effects.In the empirical research section,five panel data models are constructed,and the sample banks are divided into three major categories,state-owned commercial banks,joint-stock commercial banks and city commercial banks according to their nature,to study the income concentration and risk effect of loan concentration.The empirical results show that the concentration of loans has no significant effect on the return of commercial banks in our country,but the impact on the risk of commercial banks in China is also different.First of all,the industry concentration has a significant impact on the risk of China's state-owned commercial banks,and positively correlated with the capital adequacy ratio and non-performing loan ratio,and negatively correlated with the Z index.Second,customer concentration and regional concentration have a significant impact on the risk of joint-stock commercial banks,negatively correlated with capital adequacy ratio,and positively correlated with non-performing loan ratio,which has nothing to do with the Z index.Industry concentration has no significant effect on capital adequacy ratio and Z index,and positively correlates with NPL ratio.Finally,the customer concentration and industry concentration of China's city commercial banks are positively correlated with the capital adequacy ratio,and the regional concentration and capital adequacy ratio are negatively correlated.The concentration of the industry is negatively related to the NPL ratio of the commercial banks in the city and a positive correlation with the Z indicator.The regional concentration is positively correlated with the non-performing loan ratio,and negatively correlated with the Z indicator.On the basis of empirical research and combined with the actual situation in our country,we put forward three proposals,which are to strengthen the regulation of loan concentration,improve the internal management mechanism of commercial banks and strengthen the construction of external environment.