Study On The Impact Of Narrowing Deposit And Loan Spreads On The Operating Performance Of China's Commercial Banks

Currently,interest income is the most important component of commercial Banks' operating income structure and the main source of commercial Banks'operating profit.Until the end of 2017,in this paper selected the typical 18 listed commercial Banks,in addition to the Min Sheng Bank and bank of Shanghai(interest income accounts for the proportion of revenue at 59.99%and 57.71%respectively),and the remaining 16 listed commercial bank interest income accounts for the proportion of revenue are above the 63%level,some Banks more than 80%level.Based on the profit structure generated by business activities,the profit model of China's commercial Banks is still at the stage of interest margin leading.China's interest rate liberalization reform began in the mid-1990s.Under the background of the continuous progress of China's interest rate liberalization reform,China gradually liberalized the control of deposit and loan interest rates on the one hand,and on the other hand,the competition among commercial Banks became increasingly fierce.Under the influence of the two factors,the deposit and loan spreads of China's commercial Banks will narrow.Under the profit model dominated by interest margin,the narrowing of deposit and loan interest margin will inevitably affect the interest margin income of China's commercial Banks,and then affect their final operating profit level.The profit level of commercial Banks is an important indicator of their business performance,so the narrowing of deposit and loan spreads will have an important impact on the business performance of commercial Banks by affecting their profit level.Present a tendency of narrow spreads in the commercial bank,in order to realize the sustainable development of commercial Banks provide advice,research spreads narrowed to the influence of commercial Banks operating performance is of great importance,so this article around under the background of market-oriented interest rate spreads narrowed the special Angle of view of the influence of the commercial Banks operating performance for research.Firstly,this paper reviews and sorts out the relevant research results of domestic and foreign scholars,which leads to the research perspective of this paper based on the narrowing of deposit and loan spreads.On this basis,in order to study the impact of narrowing deposit and loan spreads on bank operating performance,this paper has determined the measurement methods of deposit and loan spreads and operating performance of China's commercial Banks.And based on the measurement method to calculate the numerical value of China's commercial Banks deposit and loan spread changes and operating performance of the development of the status quo is introduced.Then,this paper focuses on the theoretical analysis of the correlation between the narrowing of commercial deposit and loan spread and its business performance.The theoretical analysis shows that the narrowing of deposit and loan interest margin under the profit-oriented interest margin model has a negative correlation effect on the business performance of commercial Banks.In order to verify the results of the theoretical analysis,this paper selected 18 representative commercial Banks in China as the research samples,and empirically studied the impact of narrowing deposit and loan spreads on the business performance of commercial Banks by establishing the stochastic effect panel regression model.Considering the heterogeneity among the selected sample Banks,this paper classifies the 18 listed commercial Banks accordingly,so as to make a comparative analysis of the difference between the narrowing of deposit and loan spreads on the operating performance of different types of commercial Banks.The empirical results show that:from the overall sample regression results,the narrowing of deposit and loan spread has a negative correlation effect on China's business performance;From the classified samples regression results,spreads on different types of commercial Banks business performance have negative effect,but the impact degree is different,the specific performance in the savings and loan spreads to the influence degree of the large state-owned commercial Banks operating performance,the largest effects on city commercial Banks operating performance is minimized,the extent of the national joint-stock commercial Banks are influenced by its in between the two;From the point of the selection of control variable regression results,bank assets on its operating performance is not significant,while the non-performing loan ratio,asset-liability ratio,LDR,diversification of income and capital adequacy ratio of commercial Banks business performance has a certain influence,the non-performing loan ratio,asset-liability ratio and loan ratio on business performance has a negative correlation effect;Income diversification and capital adequacy ratio have positive correlation effect on business performance.In order to ensure the objectivity and accuracy of the empirical results,this paper further analyzes the robustness of the empirical results,and the robustness test results are consistent with the empirical results.Finally,based on the results of empirical research,this paper puts forward corresponding countermeasures and Suggestions on how to improve the level of business performance and achieve sustainable development of China's commercial Banks under the background of narrowing deposit and loan spreads.