Study On The Earning Ability Of Chinese Commercial Banks

In recent years, the reform and the development of the Chinese commercial banks have caused intense arguments and attentions. At present, enhancing the competitive ability has become the most urgent and important subject for the Chinese commercial banks. Although the Chinese banks' strength have been enhanced greatly through the reform and the opening to the outside in more than 20 years, there still exists major gap between the Chinese banks and those of developed countries. The term of protection of entering WTO is imminent day by day, and the Chinese finance industry is experiencing reborn transformation. Many international big banks with history of hundreds of years enter into China and become a driving force of the Chinese finance market reform. While providing high quality service to the common people, they also bring great pressure to the Chinese banking industry.The Chinese banking industry made great development in 2004, and improved business performance dramatically. But the whole earning ability of the Chinese banks is still weak. The gap between the Chinese banks and foreign banks will become bigger and bigger if the earning ability of the Chinese banks cannot improve before 2007. The current business environment is changing profoundly, which brings huge pressure to the operation and management of the Chinese banks. The Chinese commercial banks feel greater pressure and the urgency to enhance their earning ability.The thesis applies many research methods such as normative study, empral study, case study , quality analysis and quantity analysis to the study on the constructing, evaluating and improving of the earning ability of the Chinese commercial banks. The analysis is built on the theory of finance, economics, management and multi-criteria decision making.First, the thesis constructs a theoretic analysis framework which suggests adirection on how to enhance the earning ability of the Chinese commercial banks. The framework is composed of three components, e.g., the system arrangement, the organization structure and the internal management. The system arrangement is the foundation of the framework and is the prerequisite for the enhancement of the banks earning ability. It stimulates and restrains the organization structure and the internal management. The organization structure, which' is the media and carrier of banks operation and is restrained by the system arrangement to some extent, is the middle level determining factor of the earning ability of banks. It plays the key role in the resources configuration and improvement of the earning ability of commercial banks. The core factor affecting the earning ability Of banks is the internal management, which drives the earning ability of banks based on the organization structure. The above three aspects organically unify in together, embodies the Chinese commercial banks' earning ability.Second, the thesis makes in-depth study on how to evaluate the earning ability of the Chinese commercial banks. The thesis makes use of specific criteria and standards to evaluate of the earning ability of commercial banks scientifically so that the weakness of the banks can be found. Traditional methods used to evaluate the earning ability of banks cannot reflect the commercial banks' real earning ability in the whole, because most of these methods only consider quantity financial standards and exclude non-financial qualify standards. Based on the theoretic framework we give earlier, the thesis puts forward a criteria system to evaluate the commercial banks' earning ability. The criteria system combines quantity and qualify standards in order to reflect real and comprehensive conditions. Based on these criteria, the thesis uses a multi-criteria evaluating method—-the analytical network process—to evaluate the earning ability of commercial banks.Finally, the thesis puts forward and discusses some suggestions on how to enhance the earning ability of the Chinese commercial banks from the perspectives of the system arrangement, the organization structure and the internal management.The three factors influence each other and combine as a whole. The system arrangement, the organization structure and the internal management should be improved simultaneously in order to enhance the earning ability of the Chinese commercial banks.