Chinese Commercial Banks Operating Performance Study

Bank is a very important section in a nation's economy system. Whether bank's operation efficiency is high or low has deep effect on not only development of bank system but also operation of the whole nation's macro economy. But in china, banks have many problems including low competitiveness, poor operation management, deficient finance innovation, too many bad debts, bigger and bigger bank risk, and so on. To solve these problems, banks' operation efficiency should be developed.This paper tries to do some studies on how to evaluate banks' operation efficiency, how far between state-owned banks and joint-stock banks and what are reasons of it, and how to improve banks' operation efficiency.The paper uses numeric and nonnumeric methods to study banks' operation efficiency. It analyzes how domestic banks' operation efficiency is and why the problems occurred by comparison and induction, and then puts forward some solutions to improve operation efficiency of the whole Chinese banks.Firstly, the paper uses two methods to synthetically evaluate 15 commercial banks' operation efficiency of China. For the first method, the paper uses common method in China of single factor method to compare banks' finance data from some different aspects, which gives us a general picture of Chinese commercial banks. And then the paper uses factor analysis method as single factor method's expansion to combine these above different factors, and draw an impersonal conclusion of banks' operation efficiency evaluation. For the second method, the paper uses DEA(Data Envelopment Analysis)method to give these banks another integrated evaluation, and calculate scores of relative efficiency, and then by calculating shadow prices and production frontier projections, the paper hopes to find out reasons of why operation efficiency score is low and means of how to improve it. The above two evaluation methods show the same conclusion: in China, joint-stock banks' operation efficiency is much better than state-owned banks.After evaluating Chinese commercial banks' operation efficiency, using western economics, finance and management theories, analyzing common theories of enterprise efficiency, and referring to the real conditions of Chinese commercialbanks and the conclusions which are drawn above, the paper deems that, because of difference of equity structures, historical reasons, and the too large scales of state-owned banks, operation efficiency of state-owned banks is far lower than joint-stock banks'. Then, the paper put forward the means to improve efficiency of the two kinds of banks. State-owned banks should reform the property structure, develop qualities of employees and assets, reduce the scale of bank, and carry out the low-price strategy. While, joint-stock banks should reform the property structure farther, promote finance innovation, and carry out the client-focus strategy.