Research On The Relationship Between Non-Interest Income And Net Interest Difference In Chinese Banking Industry

The release of the deposit rate ceiling from October 24,2015 in China marked a crucial step in the reform of interest rate liberalization over the past two decades.Interest rate control has basically been liberalized.Under such circumstances,the development of non-interest-based businesses has become a major step.The mainstream consensus of the banking industry in China,non-interest income also plays an increasingly important role in the bank's income structure.This article explores the relationship between non-interest income and net interest margin of China's commercial banks and the relationship between the interest rate regulation and non-regulation and the interest rate liberalization.We will actively deal with the interest rate liberalization of commercial banks.The impact of coming to ensure its own profitability has important theoretical and practical significance.Based on the background of China's interest rate liberalization reform,this paper analyzes theoretically the influencing factors of China's banking net interest margin,especially focusing on the role of interest rate liberalization in the relationship between non-interest income and net interest margin.In the non-interest-related business,the complementary demand business(such as fee and commission income,financial advisory consulting business income)and loan business cross-demand price elasticity is negative,while the alternative business(such as exchange gains,investment income,lease trust business income The cross-demand price elasticity with the loan business is positive.Through analysis of the profit constraint mechanism and the pressure mechanism,the increase in alternative non-interest income is more conducive to the loan business income than the increase in complementary non-interest income.There are differences in the relationship between non-interest income and net interest margin of different types of banks through the analysis of resource constraints.Through theoretical analysis,due to the different income structure of banking financial institutions in different stages of China and the different non-interest business structures of different types of commercial banks in China,this paper further proposes two hypotheses that can be tested:(1)Interest rate marketization reforms It has a negative impact on the relationship between non-interest income and net interest margin,and it will increase negatively with the increase in the degree of interest rate liberalization.(2)There is a significant difference in the relationship between non-interest income and net interest margin among different types of banks.Specifically,for state-owned commercial banks,there is a positive relationship between non-interest income and net interest margin;for joint-stock commercial banks,there is a positive relationship between non-interest income and net interest margin;for urban commercial banks,there is a negative relationship between non-interest income and net interest margin.On this basis,this paper uses the non-balanced panel data of 109 commercial banks in China from 2005 to 2015 to establish a simultaneous equation model,and empirically studies the relationship between non-interest income and net interest margin in the Chinese banking industry.The indicators of the individual characteristics of the type commercial bank(including the market share of the bank,risk aversion,transaction size,credit risk,implicit interest expense,asset size,loan ratio,and liquidity risk)are used as control variables.This article first uses 109 commercial banks as a benchmark for regression,and then joins the interest rate marketization index to return.By comparing the results of these two groups,we analyze the relationship between interest rate liberalization and the bank's non-interest income and net interest margin.Impact;According to the difference in the level of interest rate liberalization reform,it is divided into two phases:2005-2012 and 2013-2015,respectively,to explore the impact of interest rate liberalization on the relationship between the two;finally,109 commercial banks are divided into state-owned commercial banks.The three groups of stocks,joint-stock commercial banks and city commercial banks respectively conducted panel data analysis to explore whether there were differences in the relationship between non-interest income and net interest margin among different types of commercial banks.Similarly,by comparing the regression results of the benchmark results with the regression results of the interest rate marketization index,it was found that the interest rate liberalization strengthened the negative relationship between the two.Through the regression analysis of the whole sample time period,it was found that as the degree of interest rate liberalization increased,the negative alternative relationship between non-interest income and net interest margin increased.Through the regression analysis of samples,it is found that there is a significant positive correlation between non-interest income and net interest margin of state-owned commercial banks;for joint-stock commercial banks,there is also a significant positive correlation between non-interest income and net interest margin;the bank's non-interest income is negatively related to the net interest margin.Based on the empirical results and the current development of China's banking industry,this paper proposes corresponding policies for China's three types of commercial banks.This article believes that commercial banks should take corresponding measures in accordance with the relationship between non-interest income and net interest margin and interest rate liberalization policies on the premise of focusing on risk management,especially urban commercial banks,according to their own With regard to resource constraints,we should develop alternative non-interest businesses such as trust leasing as much as possible to suit our own development status and current policy environment,and promote positive and coordinated development of non-interest income and net interest margin,and optimize the allocation of bank resources.