| Commercial Banks occupy an important position in China's national economic and financial operation, but the profitability of majority our commercial banks is not optimistic. With the continuous deepening of the reform of the financial system, China's commercial banks will be confronted with more severe challenges from home and abroad. As an enterprise's core competencies, improve the profitability of commercial banks to solve current business problems will be an important element. In this background, the paper analyses the influence of the capital structure to the profitability of commercial banks, and aims to enhance the profitability of the domestic commercial banks through adjusting the capital structure.This paper uses the econometrics method, selects the correlative data of the four state-owned and some stock commercial banks of our country from 1998 to 2005 as samples, make a regression analysis regarding the influence of the capital structure to the profitability based on the analysis about the capital structure and the profitability. Regression analysis result shows:①the positive correlation between debt-to-asset ratio and profitability ;②the negative correlation between scale of total capital and profit ratio of total capital;③the negative correlation between deposit-to-total capital ratio and profit ratio of total capital;④the positive correlation between paid-up capital-to-total capital ratio and profit ratio of total capital.Through the syndrome analysis, the result of this paper is great amount of bed assets of state—owned commercial banks have been peeled off and new assets have been infused, but total capital structure of our commercial banks is not reasonable, assets quality is not good. Aimed at this situation , this paper argues that we should focus on the bank's own capital structure and the outside environment, improving profitability, and ensuring that China's commercial banks can be healthy, rapid and sustainable development. |
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