Research On The Impact Of Deposit Competition And Financial Products On Bank Profitability

During the economic downturn,the competition for deposits in commercial banks continued to intensify.At the same time,the business of off-balance sheet financial products business developed rapidly.However,the profitability of commercial banks has continued to decline,and the transformation of business operations has not yet been completed.In order to explore how the development of deposit competition and financial products affect the profitability of commercial banks,this paper studies the quarterly panel data of 16 national commercial banks listed in A-shares for 2011-2017.The study found that in recent years,the growth rate of deposits of financial institutions has fluctuated,and the competition in the deposit market of commercial banks has become increasingly fierce.Financial products developed rapidly,at the same time,the distribution of its term structure is still unbalanced,and the investment in assets is relatively simple.The market positioning of financial products is not clear.Although the net profit of banks has been rising in recent years,the return on total assets has been declining year by year,and the bank's profitability is not optimistic.So this paper introduces a fixed effect model and further empirically analyzes the problem.The regression results show that the increasing fierce deposit competition will curb the profitability of commercial banks,and the development of financial products can enhance the bank's profitability,but the problems exposed in the developed of financial products constrain this positive effect.This paper innovatively analyzes the key business of commercial banks from the perspective of both internal and external,and provides novel research ideas for exploring the transformation of banking operations.It is also proposed that the supervisory authority should ease the bank's reserve pressure by adjusting the deposit deviation,control the potential risks caused by the increased competition in deposits,and work together to achieve effective compatibility between bank deposit competition and banking stability.Commercial banks should increase investment in innovation,change the positioning of financial business,realize the transformation of financial products,and do fine work to guide the transformation of banking business.And commercial banks should continue to develop intermediary business,increase the proportion of non-interest income,and optimize the income structure.It is expected that commercial banks will complete the transformation of their business operations under the new situation and win new opportunities for development.