| With the acceleration of China’s interest rate marketization reform process,capital supervision requirements are becoming more and more strict.The rapid development of financial innovation and the opening of financial markets have resulted in a narrowing of net interest margin,which has seriously restricted the ability of commercial banks to rely on traditional credit for profitability.Under this background,commercial banks need to change their income structure to cope with the changes in the internal and external economic environment.Non-interest business has become the focus of our commercial banks’ profit transformation due to its characteristics of less capital occupation and strong anti-periodicity.However,whether diversification of income and development of new non-interest businesses are conducive to improving and stabilizing the profitability of various types of commercial banks still needs to be specifically and deeply studied.The motivation for the increasingly diversified income structure of commercial banks is economies of scale and scope,which can improve and stabilize profitability through resource sharing,risk diversification and market competitiveness enhancement.Based on the panel data of 26 listed commercial banks from 2008 to2018,this paper empirically tests the influence of income structure on the profitability of commercial banks from the perspectives of income diversification,non-interest income ratio and internal composition ratio.The empirical results show that:(1)the degree of income diversification has a significant difference in the profitability of different types of commercial banks.Diversification of income of all sample banks significantly improves the profitability of commercial banks,of which large state-owned banks have the strongest promotion effect and joint-stock banks and agricultural firms have significant negative effects.(2)From the perspective of the proportion of non-interest income,the increase of the proportion of non-interest income of the overall commercial banks and large state-owned commercial banks can improve the profitability of commercial banks.The increase of the proportion ofnon-interest income of small and medium-sized banks such as joint-stock banks and agricultural banks has a negative effect on the profitability,while urban commercial banks are not significant.(3)The fees,commissions and other businesses of all sample banks and large state-owned banks are the main foothold for non-interest businesses to improve their profitability,while the net fees and commissions of other banks have no significant positive effect.Investment income and other business income are not conducive to the improvement of commercial banks’ profitability.Based on the theoretical basis and empirical analysis of the influence of commercial banks’ income structure on profitability,we can see that different types of commercial banks should adjust their income structure according to their own characteristics,and put forward the following suggestions to different types of commercial banks:(1)large state-owned banks should give full play to their advantages in asset scale,professional product research and development technology,etc.,improve the degree of income diversification and actively carry out non-interest business under the premise of controlling costs;(2)Joint-stock banks should prudently carry out diversified income businesses,devote themselves to developing their own characteristic businesses,and avoid blindly pursuing an increase in the proportion of non-interest business income;(3)City commercial banks and agricultural commercial banks rely on the local economy,based on their operating characteristics,to carry out products and services that meet the financial needs of customer groups,and to enhance their profitability.However,commercial banks should ensure the basic position of traditional interest business while diversifying their income,carry out non-interest business rationally and continuously optimize the internal structure of non-interest business. |
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