Empirical Study Of Chinese Commercial Bank Profit Efficiency

Commercial banks take a dominant position in the financial industry and played a pivotal role in the modern market economy, but also the commercial banks are the government's market-based who carry on the macro-control. With the financial globalization and deregulation of the banking,making China's financial market environment has undergone significant change, not just competition in the domestic banking, foreign banks also joined the ranks.The concrete manifestation of banks'Core competition is the efficiency.Facing such fiercely market competition and survival, the Agricultural Bank of China must improve the profit efficiency in order to gain a firm foothold in the competition and walk the sustainable development road. Therefore, there are important theoretical and practical significance toresearch the profit efficiency which make the goal based on commercial banks to pursue profit maximization.The Agricultural Bank of China as the main object of the articles'studied object,basing on the conclusion of the foreign and domestic banks'efficiency,through researching the fourteen commercial banks' profit efficiency during 2000 to 2009 by the Stochastic Frontier Approach(SFA), and proved the efficiency of the bank's profit decreased over time, measure the efficiency of China's agriculture bank profits in the banking industry. Then established the econometric models for study the influence facrors of Agricultural Bank of China's profit efficiency,including:total assets, capital adequacy ratio, cost to income ratio, non-interest income/total revenue, deposit ratio, equity ratio Non-performing loan ratio. Finally,Based on the results, how to improve the efficiency of the profits of the Agricultural Bank of China put forward some policy recommendations to improve:Continuously improving the ABC's capital adequacy ratio,strengthen the ability to withstand risk;the business process reform; developing intermediary business, promote financial innovation; strengthen human resources management and continuously improve the quality of the employees; reducing bad loan ratio, improve ABC's asset quality; speed up the ABC's building and technological innovation of information, save operating expenses.