Research On The Profitability Of China Merchants Bank

Commercial banks are an important form of financial industry and an indispensable core of the financial industry.In the past 40 years of reform and opening-up,the number of commercial banks has increased rapidly,and all kinds of commercial banks,such as state-owned banks and joint-stock banks,have flourished;major commercial banks have actively opened outlets covering large and small cities and villages;business types have emerged in endlessly,from the past single deposit and loan business to the present deposit and loan business,mainly international settlement,wealth management and advisory services.And other business development.Taking China Merchants Bank as an example,it was founded in 1987 in Shekou,Shenzhen.By 2017,its total assets had reached 6.29 trillion yuan,and its net profit was 70.6 billion yuan.There were more than 1800 branches in China with130 outlets in 130 cities,making it the fifth largest bank in China.However,in recent years,China's banking industry is facing a more complex internal and external situation.On the one hand,the macroeconomic growth slows down and the momentum of economic transformation is obvious.The macroeconomic is in the stage of the transformation of new and old momentum.It requires the transformation from extensive growth to intensive growth,which requires the commercial banks in China to allocate financial resources more efficiently to support the transformation and upgrading of the real economy.On the other hand,the financial industry reform closely related to banks is also deepening.The supply-side reform of the financial industry requires commercial banks to pay more attention to the efficiency of the use of financial resources.The acceleration of interest rate marketization and the rapid development of Internet finance make the most fundamental deposit and loan profit model of commercial banks face pressure.All these have brought new challenges to the development of China Merchants Bank.Based on this background,this paper takes China Merchants Bank as the research object to analyze its profitability.Firstly,this paper expounds the concept and theory,collates the current domestic and foreign scholars' research status on commercial banks' profitability,and uses this as a reference to clarify the research ideas and methods used in this paper.This paper explains the concepts of commercial banks,commercial banks' operating principles and commercial banks' profitability evaluation methods,and finally determines that the DuPont analysis methodsuitable for commercial banks operating characteristics is the theoretical analysis method of this paper.Secondly,the paper makes a theoretical analysis of the profitability of China Merchants Bank,including the longitudinal analysis of its own changes and the horizontal comparative analysis of the same industry,from the two dimensions of the profitability and stability of China Merchants Bank.In terms of profitability,the DuPont analysis method adapted to the specific situation of commercial banks is used to analyze the changes in the rate of return,the main business income,the composition of profits and the cost expenditure.In terms of stability,we use two kinds of indicators: national regulatory requirements indicators and self-risk control indicators for analysis.Through the vertical comparison,the change trend of China Merchants Bank's profitability is clarified,and the competitiveness of China Merchants Bank's profitability is clarified through the horizontal comparison.Several factors,such as total assets,are preliminarily concluded that may have an important impact on China Merchants Bank's profitability.Thirdly,the profitability of China Merchants Bank is empirically analyzed.Several influencing factors are taken as explanatory variables,and a multiple linear regression model is established by using analysis software to quantitatively study the influence degree of these factors.Finally,we draw the conclusion that the size of the bank,the rate of non-performing loans and the return on assets of China Merchants Bank are negatively correlated,while the intermediate business ability,operating efficiency and deposit and loan structure are positively correlated with the return on assets of China Merchants Bank.Finally,by integrating the results of theoretical analysis and empirical analysis,this paper summarizes the shortcomings of the profitability of China Merchants Bank,and puts forward some suggestions to improve the profitability of China Merchants Bank: reasonably controlling the scale of assets,building digital banks,strictly controlling the quality of assets and expanding diversified sources of income.