Analysis On Profitability Of China Merchants Bank

With the continuous development of financial reform,profitability has became one of the main indicators that used to measure the competitiveness of commercial Banks.In the process of China's economic reform,joint-stock commercial Banks emerge at the historic moment.In the development process of several decades,they have effectively used the capital market,acquired rather strong anti-risk ability,and continuously improved profitability.However,there are still many problems in improving profitability,which need to be further improved.Taking China Merchants Bank as the research object,this paper first ly discusses its background and Research Significance,studying a series of relevant theories and methods and reviewing the research status of profitability both at home and abroad.At the same time,this paper also analyzes the factors that affect the profitability of Banks so as to better analyze the profitability of China Merchants Bank.Secondly,This paper takes the relevant data of China merchants bank from 2013 to 2017 as samples and adopted the optimized Dupont analysis model to analyze the data,so as to better understand the current profitability status of China merchants bank.What's more,Entropy method was used to evaluate and rank the profitability level of the eight joint-stock commercial Banks listed in 2017,including China merchants bank,and four of them were selected to analyze their profitability with the financial data from 2013 to 2017.Through horizontal and vertical comprehensive comparative analysis,we can better understand the current development situation of China merchants bank,clarifying its profitability changes and position in the whole industry,and finding o u t t h e p r o b l e m s a n d w e a k l i n k s i n i t s d e v e l o p m e n t p r o c e s s i n t i m e.The results show that the operating efficiency of China merchants bank is relatively stable.What's more,it also show that the profit fluctuation is generally not too big,and the overall management level is in a high state.The main factors affecting CMB's profitability include asset size,working capital,intermediary business,capital adequacy ratio and non-performing loan ratio.For example,the proportion of intermediary business is insufficient,the cost of borrowing services rises and interest rates fall.These problems have seriously affected the profitability and long-term development of Banks.For these reasons,this study proposes a diversified development model,carrying out the comprehensive development of intermediary business and improving its capital adequacy ratio.This thesis also puts forward that it should maintain moderate liquidity,timely adjusts its strategy to meet the needs of industry development and provides targeted solutions.The results of this study can help the managers of China merchants bank to clarify their thoughts to a certain extent,more objectively recognize the many differences between China merchants bank and many competitors in operation.In this way it also help them to find out the main factors affecting its profitability,and make reasonable profit plans,which provide reference for other joint-stock commercial Banks.