Research On The Influence Of Real Estate Loans On The Earnings And Risks Of Commercial Banks

Since 2020,due to the impact of the epidemic,the heat of the real estate market has dropped significantly.Under the background of "no speculation in housing",the central government has adopted a de financialization policy for the real estate industry.In some cities,real estate enterprises are unable to deliver their houses on time,which has led some households to decide to repay their loans in advance,which will undoubtedly increase the operational risk of commercial banks.Therefore,in the case of changes in housing prices,what is the impact of the proportion of real estate loan business on bank income and risk? Recently,this problem has gradually become a concern of the academic community and society.Based on the existing literature,this paper conducts research on the above issues from two aspects of theoretical analysis and empirical analysis.In the static perspective: First,we will study the impact of the proportion of real estate credit business on the income of commercial banks;Then,we will study the impact of the proportion of real estate credit business on the operational risk of commercial banks.In a dynamic perspective: we will study how the proportion of real estate credit affects the income and risk of commercial banks in the case of price changes.At the empirical research level,we used the data of 73 commercial banks in China from 2011 to2020 for research.The results show that,in terms of income level,when the housing price changes in the city are not considered,the real estate credit business has no significant impact on the income level of commercial banks.However,when the house price in the city where the bank is located rises,more real estate credit business can improve the income level for commercial banks.Business risk: When the house price in the city where the bank is located rises,more real estate credit business can reduce the business risk for commercial banks.Furthermore,we explore whether the main conclusions of this paper are heterogeneous for banks of different sizes.The results show that for smaller commercial banks,when the housing price in the area where they are located rises,their increase in the proportion of real estate credit business will promote the level of yield to a greater extent,and can also promote the reduction of bank operating risk.However,for larger banks,the above effect is not obvious.Based on this research,this paper provides corresponding policy recommendations for commercial banks and financial supervision departments.Among them,for commercial banks,it is necessary to assess the situation and make a clear judgment on the future trend of housing prices in the region,so as to adjust the proportion of real estate loans to the most favorable level.As for the financial supervision department,it is necessary to take measures according to the city.According to the characteristics of each city’s real estate market and the expected trend of housing prices,it is not a one size fits all approach to formulate appropriate regulatory standards for real estate loan business for commercial banks.