Research On The Impact Of Loan Concentration On The Operating Performance Of Listed City Commercial Banks

Under the circumstances of global economic downturn,the marketization of interest rates was further promoted,the prevalence of third-party payment and the intensification financial disintermediation,the development of China’s commercial banks is facing severe challenges.However,in the early extensive growth process,China’s commercial banks in order to pursue efficiency,loan issuance is too concentrated,resulting in unreasonable loan structure.With the transformation of China’s economic institutions,the economic effects of traditional customers and big customers begin to decline,and the disadvantages of loan concentration are constantly exposed.Compared with large and medium-sized joint-stock banks,China’s city commercial banks have disadvantages such as unimpeded access to information,disorderly ownership structure,limited to local areas,low quality of personnel and heavy historical burden.These make the problem of the city commercial bank loan concentration is often more obvious than other banks,increasing the loan risk of the bank.Therefore,it is particularly necessary to analyze the impact of loan concentration on business performance and put forward relevant countermeasures for loan concentration management.Based on the annual reports disclosed by China’s listed city commercial banks,this paper collects the relevant data of loan concentration and operating performance of 28 listed city commercial banks from 2016 to 2020.The exposure ratio method and Herfindall-Hirschmann index are used to measure the customer concentration degree and industry concentration degree of loans,and a more comprehensive and accurate operating performance of listed city commercial banks is obtained through factor analysis.This paper selects the customer and industry concentration of loans as independent variables,business performance as dependent variables,GDP,total bank assets,bank net asset growth rate and main profit growth rate as control variables,constructs a panel data model and makes an empirical analysis.At the same time,according to the different business regions of banks,this paper analyzes the regional heterogeneity of the impact of loan concentration on business performance.The empirical results show that customer concentration and industry concentration have a negative impact on the operating performance of listed city commercial banks.For banks in the eastern and central regions,customer concentration has a negative and significant impact on bank performance,while for banks in the western region,although customer concentration has a negative impact on bank performance,the impact is not significant.For banks in the central and western regions,industry concentration has a negative and significant impact on bank performance.For banks in the eastern region,although the industry concentration has a negative impact on banks,the impact is not significant.According to the above empirical analysis results,this paper puts forward relevant suggestions from the perspective of reducing the loan concentration of city commercial banks and improving business performance.