Research On The Influence Of Interest Rate Marketization On The Profitability Of Commercial Banks In China

As the price of capital,interest rate is the core of a country's finance and economy.Its change inevitably has a huge impact on the whole national economy,especially in the financial market,the change of interest rate will have a profound impact on the security and stability of the market.Since 1996,the liberalization of interbank lending rate marks the formal beginning of the market-oriented reform of interest rate in China.By October 2015,the people's Bank of China has deregulated the upper limit of deposit interest rates of commercial banks and rural cooperative financial institutions,marking the basic completion of the reform of interest rate liberalization in China.As the main body of the financial market,the operation development and profitability of commercial banks are bound to be affected by the reform of interest rate liberalization.In the period of interest rate control,China's commercial banks have formed a quantitative business development mode based on asset scale expansion.The deposit and loan banking mode is deeply rooted,and the stable interest margin makes the commercial banks obtain huge and stable profits.With the completion of interest rate marketization reform,the reduction of deposit loan interest margin,and the development of Internet finance,P2 P network lending and other non bank social financing institutions,the profit space of commercial banks has been further eroded.Therefore,it is of great theoretical and practical significance to study how commercial banks can enhance their profitability and realize their sustainable development in the new financial environment.Firstly,this paper collects relevant literature at home and abroad,expounds the importance of interest rate marketization and the historical evolution of interest rate marketization in China,and describes the theory of interest rate marketization and the profitability of commercial banks as the basis of discussion.Secondly,16 listed banks in China are classified into large-scale joint-stock commercial banks,small and medium-sized joint-stock commercial banks and urban commercial banks according to their asset scale and number of outlets.Taking the financial data of 7 years from 2012 to2018 as samples,this paper makes a comparative analysis on the current situation and changes of profitability of all 16 listed commercial banks in the process of interest rate marketization in China.At the same time,the asset yield ROA is selected as theexplained variable,and the net interest margin(NIS),non-performing loan ratio(NPL)are selected,Non interest income ratio(UN),cost income ratio(CBB)and deposit loan ratio(LDR)were used as explanatory variables to study the impact of these variables on the profitability of commercial banks.Finally,according to the empirical results,the paper puts forward suggestions to state-owned holding banks,joint-stock banks and urban commercial banks,hoping that different types of commercial banks can further optimize their operation and management and improve their profitability in the context of interest rate liberalization.