A Study On The Profitability Of Bank Of Nanjing From The Perspective Of Improved DuPont Analysis

In recent years,China's urban commercial banks have made great progress in business operation and other aspects.The research on profitability is the key to analyze the operation level of banks,and DuPont analysis is the classic method to evaluate profitability.Based on this unique nature of banking industry,this paper improves the traditional DuPont analysis method to make it suitable for evaluating the profitability of commercial banks.Nanjing bank is one of the earliest listed urban commercial banks in China.The research on its profitability can bring more valuable suggestions for the better development of urban commercial banks in China.First of all,this paper introduces the research status at home and abroad as well as the relevant theories and methods of bank profitability,defines the connotation of commercial bank profitability,and analyzes the influencing factors of commercial bank profitability.Secondly,the financial data of Bank of Nanjing from 2014 to 2018 are selected as samples.Based on the improved DuPont analysis system and factor analysis method,the profitability status of Bank of Nanjing is analyzed,and the profitability of Bank of Nanjing is compared with that of other two urban commercial banks of the same type.Then,we use the time series model to make multiple regression on the indicators that affect thesustainability of the profitability of Bank of Nanjing,and analyze them according to the empirical results.Finally,according to the above analysis results,this paper puts forward corresponding suggestions on how to improve the profitability of Bank of Nanjing.The research shows that the profitability level of Bank of Nanjing is relatively stable,and the factors that have a significant impact on the profitability of Bank of Nanjing mainly include operating expenses,interest income,other non interest income,net interest margin,intermediary business income,etc.For example,the proportion of intermediary business is insufficient,asset impairment loss increases and interest rate decreases,which seriously affect the profitability and long-term development of banks.Therefore,in order to effectively improve the profitability of Bank of Nanjing,this paper puts forward targeted solutions,mainly including: improving deposit and loan business,developing intermediary business,expanding personal retail business,reasonably controlling cost and expense,strengthening risk management mechanism,and maintaining appropriate liquidity.