Research On Profitability And Its Influencing Factors Of China's Commercial Banks

As the core of China's financial system,commercial banks' enhancement of profitability is an important basis for the healthy and stable development of banks,and is also the ultimate goal pursued by banks.As China's economic development has entered the "new normal",the internal and external environment of commercial banks is undergoing profound changes.The Fed has raised interest rates many times,the uncertainty brought about by Sino-US trade frictions,the domestic economic cycle and The superposition of structural problems has continuously strengthened the supervision of the banking industry of financial enterprises,resulting in the credit contraction of the whole society and the downward pressure on the domestic economy.At the same time,the deepening of interest rate marketization,the emergence of Internet finance has a great impact on the long-term development of China's banking industry.The development of private banks and foreign banks has intensified the pressure of peer-to-peer competition in China's commercial banks,making the net of China's commercial banks The profit growth rate has been declining year by year,the net interest margin has narrowed,and the bank's profitability has weakened.Therefore,in order to cope with the severe complex situation at home and abroad,how to improve the profitability of China's commercial banks and explore the relationship between commercial banks' profitability and its influencing factors has become the focus of this paper.Based on the theory of profitability,this paper focuses on the influencing factors of the profitability of commercial banks in China.Firstly,the meaning of the profitability of China's commercial banks is determined.From the different perspectives,the current situation of the profitability of the entire industry in which commercial banks are located is dynamically analyzed,and the problems faced by the profitability of commercial banks in China are summarized.Based on the theoretical analysis,the Stata software was used to perform panel regression analysis on the data of 16 listed commercial banks from 2008 to 2017.By analyzing the results of the fixed-effect regression model,the profitability of commercial banks and their macro,meso and micro impacts were summarized.The relationship between the factors is:(1)From the external perspective,the operation of China's commercial banks is greatly affected by the national macroeconomic policies,which explains to a certain extent that China's commercial banks are not fully economical.The degree of marketization changes,and the degree of marketization needs to be further strengthened;inflation level(Inflation),market structure(MS),and market concentration(HHI)are significantly negatively correlated with the profitability of commercial banks.(2)From the perspective of the bank's own factors,the excessive expansion of the bank's asset size(Inscale)will significantly limit the improvement of commercial banks' profitability;higher non-performing loan ratio(ZC),cost-to-income ratio(INF)and non-interest business operations The incremental costs and volatility of earnings will weaken the profitability of commercial banks;capital adequacy ratio(CAR)and asset quality(In LIP)are significantly positively correlated with commercial bank profitability;liquidity(NCF)and business Bank profitability is positively correlated but the impact is not significant.Finally,based on the above analysis results,the policy recommendations with realistic reference value are proposed to enhance the profitability of commercial banks in China.