A Study On The Impact Of Chinese Listed Commercial Banks’ Income Structure On Profitability

For a long time,the domestic listed commercial Banks have made a lot of profits by virtue of the high interest margin of the deposit and loan business,but this has also caused the commercial Banks to rely on this high interest margin profit model.Economy enters the new normal,interest rate marketization in our country was basically completed,the rapid development of Internet financial and all kinds of financial institutions under the background of increasing competition,our country commercial bank spreads further contraction,the use of high spreads easily earn the profit pattern of net interest income is unsustainable and the resulting commercial bank’s net profit growth is slowing.In such a profit growth under pressure,positive development of non-interest business,to the diversified income structure transformation,develop a new source of income to enhance their profitability has become the consensus of all kinds of commercial Banks,but the income structure diversity really can improve the profitability of Chinese commercial Banks will need to be further explored.This paper first expounds the concepts of income structure and profitability of commercial Banks,and conducts a theoretical analysis on how the income structure affects the profitability of commercial Banks,which provides a theoretical basis for the following empirical analysis.Then it analyzes the current situation of the income structure and profitability of listed commercial Banks in China.There is a big gap in the development of non-interest business between different commercial Banks.The internal development of non-interest business is unbalanced;The overall profitability of listed commercial Banks,namely the total asset profit margin,showed an obvious downward trend after 2012.Finally,in the empirical part,this paper took 21 listed commercial Banks from 2008 to 2017 as the research samples,divided them into three categories according to size and nature: large state-owned Banks,joint-stock Banks and urban commercial Banks,and used the fixed effect model to study the impact of income structure on the profitability of commercial Banks.The results show that the diversified income structure can help improve the overall profitability of large state-owned commercial Banks and joint-stock commercial Banks,but it cannot significantly improve the profitability of urban commercial Banks.Different components of income structure have different influences on the performance of three types of commercial Banks.The proportion of fees and commissions is positively correlated with the profitability of the three types of commercial Banks.The increase of the proportion of investment income helps to improve the profitability of large state-owned commercial Banks and joint-stock commercial Banks,but has no significant impact on urban commercial Banks.Finally,based on the relevant conclusions of theoretical and empirical analysis,this paper puts forward three Suggestions that are conducive to the reasonable transformation of the income structure of listed commercial Banks,including the reasonable diversification of income,the development of key and characteristic businesses,and the training and introduction of professional talents.