Performance And Its Influencing Factors Of China’s City Commercial Banks

Since the1990s, with the deepening of degree of market economy, our financialsystem reform has develped. Our city commercial bank, which called "third echelon"in our country banking, are growing rapidly. City commercial Banks in China isbased on the original urban credit cooperatives. They are joint stock commercialBanks, which fund is from cities enterprise, the residents and local financialinvestment.Its main task is to provide financial support for the economicdevelopment of the region through the financing behavior. Its main business is towardsmall and medium-sized enterprise in city, effectivly fill the gaps of the shortcomingsof the business scope in large state-owned commercial bank. By the end of2010,there were147city commercial banks in China with206604employees, and thetotal amount of assets is7.8526trillion yuan, and after-tax profits is76.98billionyuan. The city commercial banks is gradually become one of the important strength inChina’s financial industry.But with the opening up of China’s financial industry, foreign Banks continue tocome into our financial market. State-owned commercial Banks and large joint-stockcommercial bank continuously expanding the scale and expanding business scope.City commercial Banks in China is facing more and more pressure of competition.How to improve the performance of city commercial Banks in China become seriousproblems to solve. This article analyzes the stiuation of the city commercial Banks inChina,and discusses the likely factors affected city commercial Banks in China, andlast put forward the policy recommendations.This article mainly from two aspects to investigate and analysis the performanceof our city commercial bank. In microscopic aspect, I mainly consider it as aenterprise, analysising its profitability, financial condition, and the trend ofdevelopment. In the macro aspect, I mainly inspect if its use of social capitalresources are effective, whether it can effectively promote the local economicdevelopment, whether it can effectivly support the development of local small andmedium-sized enterprise and so on.This paper is based on practical data, choosing representative city commercial banks in different regions to do empirical analysis. Through the analysis of the datawe can conlude that the performance of city commercial Banks in China need toimprove in both microscopic aspect and macroscopic aspect.It mainly displays insome aspects. There has certain margin gap between the city commercial Banks andthe assets of the state-owned commercial bank; City commercial Banks in China aregenerally smaller, and their profit level is low; The credit allocation of resources ofcity commercial Banks in China is against the healthy development of the nationaleconomy. The support to private enterprise and small and medium-sized enterprises isstill insufficient,and the support to those companys which need financial support butit’s hard to get credit unit in community economy is very poor; City commercial bankis still in high risk of bad loans.in view of the problems0f city commercial Banks in China, This article willanalysis the factors influenced the performance of the city ommercial Banks bysystem. This paper mainly use the theory of property rights and market structuretheory. The different structures of property right bank have different incentivemechanism, and result in different influence to bank management efficiency.Different incentive mechanism can lead to enterprise produce different preferencesof business behavior, so the management efficiency is high or low. Generallyspeaking, a wholly state-owned bank business efficiency is low, the joint stockcommercial Banks and private Banks of higher efficiency are high. Commercialbanking industry performance also infulenced by its market structure. We can say, theproperty right structure and market structure are the two fundamental factors whichaffect the industry performance of commercial bank.Through empirical analysis, This article screen the factors which likely to affectthe industry performance of city commercial Banks in China, and put forward somespecific advice according to the results.