The Study Of Commercial Banks' Efficiency Of China Based On SFA

This paper uses SFA (Stochastic Frontier Approach) to estimate the cost efficiency, standard profit efficiency and alternative profit efficiency of 15 commercial banks in our country;employs Panel Data regression models to analyze the factors influencing three kinds of efficiency of commercial banks;gives some suggestions to improve banks' efficiency.Firstly this paper uses SFA to estimate the cost efficiency, standard profit efficiency and alternative profit efficiency of 15 commercial banks in our country from 1999 to 2004. By comparing efficiency difference and difference between different kinds of efficiency of the commercial banks, the author found the average cost efficiency of state-owned commercial banks was slightly higher(about 5% ) than that of the commercial banks of the shareholding system;The average profit efficiency of commercial banks of shareholding system is well-above (about 25% ) of state-owned commercial banks. It is analyzed that three kind efficiencies' value of all 15 commercial banks are increased progressively year by year.Subsequently, this paper employs Panel Data regression models to analyze the factor influencing three kinds of efficiency of commercial banks. The research on the ownership of the commercial banks shows greater differences of the efficiency value between the commercial banks of the shareholding system and state-owned commercial banks, confirms the calculating results of foregoing part. The author carries on research on the state-owned commercial banks and commercial banks of the shareholding system respectively, has rejected factors of having little effect on efficiency of the banks', selects 7 characteristic vectors: the ratio of capital/assets, the market share of assets, bad loan reserved ratio, the ratio of non-performing loan, the ratio of loan/deposit, technological progress etc. to do empirical research. The influencing factors of state-owned commercial banks are the ratio of capital/assets, the capital stock return ratio, the market share of assets, the ratio of non-performing loan and technological progress. And those of shareholding system commercial banks are the ratio of loan/deposit, the ratio of non-performing loan, bad loan reserved ratio, the market share of assets and technological progress.According to empirical research the author thinks state-owned commercial banks should shrink scale appropriately, shareholding system commercial banks should continue expanding business;each bank should reduce the ratio of the non-performing loan, raise the endurance of risk;allow mixed banking operation appropriately.