Analysis On The Impact Of Credit Expansion On The Performance Of Chinese Commercial Banks

Affected by the subprime mortgage crisis in the United States,since the second quarter of 2008,the global economy was in a state of depression,and China's economic situation also took a sharp turn for the worse.In order to cope with the financial crisis,promote economic growth,and further expand domestic demand,the Chinese government introduced a four trillion RMB economic stimulus policy.Under the guidance of easy monetary policy and prudent fiscal policy,the credit scale of commercial Banks expanded and the growth rate of credit accelerated.In 2009,the growth rate of credit expansion reached the highest peak in nearly 20 years,and the credit scale reached 80 trillion yuan.Since 2014,China's economy has entered a new normal.Commercial Banks have been affected by financial disintermediation,narrowing deposit and loan spreads,Internet finance and private lending,and the expansion rate of credit has slowed down.Commercial Banks pursue profit maximization and actively cooperate with macroeconomic policies to ensure the healthy and stable development of the national financial market.At the present stage,commercial Banks' "going out" strategy is in a period of rapid development.The prosperity of the banking industry will inevitably lead to the expansion of credit assets.The increase of credit scale means the increase of credit funds in the financial market.The expansion of domestic credit market under China's macroeconomic policy and the adjustment of credit orientation to guide and promote the adjustment of industrial structure can effectively promote the transformation of China's economic development mode.However,due to the pro-cyclical nature of commercial Banks;the expansion of credit will inevitably lead to inflation and asset price bubbles,which will have a certain impact on the performance of Banks.In recent years,the CPC Central Committee attaches great importance to financial risks,xi in the Political Bureau of the CPC Central Committee general secretary presided over learning emphasizes to safeguard national financial security,and have made important instructions on the prevention and control financial risks,in the current "financial deleveraging" big background,the commercial Danks how to balance the good credit expansion and exposure problem become a hot issue at present.The theoretical analysis of this paper follows the principle from general to special.On the one hand,from the theoretical point of view,the motivation of credit expansion,the consideration of performance indicators,and the reason and mechanism of credit expansion will lead to the deterioration of bank performance are expounded.On the other hand,combining China's national conditions and the development history of the banking industry,this paper analyzes the credit scale,growth rate and non-performing loans of China's banking industry in recent years,laying a theoretical and practical foundation for the next empirical analysis.According to the theoretical analysis above,in the empirical part of chapter 4,this paper takes 2006-2018 as the research interval,selects 16 listed Banks in China as the research samples,and adopts the panel model of intermediary effects to analyze the relationship between credit expansion and bank performance.In terms of variable selection,in this paper,the one-year loan growth as explanatory variables,non-performing loan ratio as intermediary variables describing the loan quality,performance indicators-economic value added(EVA),as interpreted variable according to the intermediary effect steps to gradually regression model analysis and inspection,and replaced as a intervening variable,provision for coverage for the robustness test.It is concluded that the increase in loan growth will increase the non-performing loan ratio after three years,leading to the deterioration in the quality of loans and the corresponding deterioration in bank performance after three years,and adversely affecting the stability of the whole banking system.Based on the research on this issue,this paper will propose Suggestions for bank operations,risk management departments and regulatory authorities on how to reduce credit risk and maintain the high-quality development of Banks.Commercial Banks should strictly guard against risks in key areas and properly defuse stock risks.Adjust the credit structure and promote economic restructuring;Strengthen credit management,avoid blind expansion,early detection of problems;At the same time,regulators should strengthen supervision and intensify the overall counter-cyclical regulation of the banking sector,that is,regulation in the period of expansion,encouraging moderate easing in the period of austerity,and achieving stable loan growth.In this way,the level of credit and risk in China's banking industry can maintain a balance.