Evaluation And Promoting Measures On Profitability Of City Commercial Banks In China

City commercial banks are local joint-stock commercial banks, which are set up on part of the urban credit cooperatives approved by the State Council. After more than10years’ development, city commercial banks have become an important power in China’s financial market.Based on the development of city commercial banks and the problems still existed, the paper analyzes the internal and external factors that influence the profitability of city commercial banks. Then, it selects17major city commercial banks in China as samples and6profitability evaluating indicators to carry out quantitative analysis. Factor Analysis reveals that bank capital, asset size and operational efficiency are the more important factors than income structure. The influence of non-interest income on the profitability of city commercial banks is limited. Through the method of K-means Cluster Analysis, it concludes that city commercial banks’ profitability has obviously regional features, that is, city commercial banks in the Eastern coastal area of China, their profitability is higher than those in the Midwest or Northeast of China. Combined with the results of Factor Analysis and K-means Cluster Analysis, it puts forward to several countermeasures to enhance the profitability of city commercial banks.