Research About Service Charge And Commission Income's Influence On Listed Commercial Banks' Profitability

With the rapid development of China's Internet finance and increasingly fierce competition among banks,commercial banks' interest margin of traditional interest business is getting smaller and smaller,so they need to diversify by developing non-interest income business.In recent years,many commercial banks learnt from large foreign banks,expanding non-interest business,especially investment and service charge,commissions units,reducing rely on interest income,all these above show that commercial banks have already started to explore various development avenues,to against adverse impacts of declining traditional interest business,and non-interest income business is playing an important role in the profitability of commercial banks.Therefore,the influence of non-interest income business on commercial banks has aroused concern,domestic and international scholars published their essays about non-interest income business,but conclusions are different.Some regarded non-interest income business as an advantage,and others held the opposite view.As non-interest income business is diversified,and various businesses present different risk return characteristics.Commission income is more stable than other income,and in recent years,commission income's proportion of commercial banks' total income is getting higher and higher.This paper studies commission income business which plays the most important role in non-interest income business,and its impact on commercial banks' profitability.In order to draw a detailed conclusion,18 commercial banks are divided into three sub-samples: state-owned banks? joint-stock banks and city commercial banks.There are six chapters in this paper,qualitative and quantitative analysis,horizontal and vertical comparative tests are designed to verify the completeness of the conclusion.Firstly,this paper expounds the research background and significance.Since there are few researches about commission income's impact on listed banks' profitability,this essay explored the relationship between commission income and banks' profitability,based on domestic commercial banks' situation,this essay could contribute to the relevant researches,enriched theoretical research results.Secondly,arranged essays about commission income's impact on listed banks' profitability,combined with qualitative analysis and quantitative analysis ? theoretical and empirical researches,found the innovations and deficiencies of this essay.Next,explained keywords of this essay,including commission income? profitability and so on.Theories about commercial banks' commission income,diversification,economies of scale,economies of scope,financial innovation were accounted to support this essay.Annual reports of 18 domestic listed banks were collected in order to analyse the status of commission and banks' profitability,profitability's impact on relevant indicators such as ROEet profit.After displayed the components and proportion of commission income,this essay reviewed commission income's development process.And then analysed changes of these 18 listed commercial banks' commission income,came to the conclusion :there were few kinds of transaction,lack of high-quality compound talents,and the innovation ability needs to be strengthened and other difficulties in commission income's development.Following,how commission income affect banks' profitability was explained.In the part of the positive analysis,18 listed commercial banks' 2012—2018 business statistics were collected,took ROA as explained variable?commission/net income?commission/investment gains?commission/exchange gains and commission/non-interest income as explanatory variables,took logarithm of asset size,non-performing loan ratio and M2 as control variables,established multiple regression equation model.Before regression,this essay classified 18 listed banks into 3 subsamples:5 large state-owned banks,8 joint stock banks,5 city commercial banks,and did descriptive statistics analysis based on all samples and subsamples,average value?median? maximum? minimum? standard deviation of variables were recorded in order to complete regression analysis.To verify the reliability,this essay took ROE as explained variable,and conclusion were consistent,which confirmed variables and model were correctly chose.According to the 18 listed banks' positive analysis results,this essay suggests as below:1.Nationalized banks could develop service charge and commission income,rich business types,expand the scale of income and total assets,develop non-interest business such as investing and agiotage,control credit risk,keep the non-performing loan ratio low at the same time;2.Stock-holding banks should also vigorously develop commission income and other non-interest business and moderately develop investment business and agiotage.,expand the scale of assets,control credit risk,keep the non-performing loan ratio low;3.City commercial banks should moderate develop commission income business,investment business and exchange business,make prudent decisions about development other non-interest business,control credit risk and zhe scale of assets,keep the non-performing loan ratio low.