Study On The Efficiency Problems Of China’s State-Owned Banks

Since opening up and reform policy, China’s Banking industry has experiencedgreat changes in the last thirty years. In the process of reform, China’s state-ownedcommercial banks play a primary role. After four specialized banks has established,the period of ‘only one bank’ in China comes to an end. With state-owed capitalinvesting, financial restructuring and shareholding reforming, all four state-ownedbanks go public in end of2011. However, four stated-owned banks monopolizenational financial market over a long period of time, so they lack of essential marketcompetition and reform initiative. In addition, with overstaffing and many problemsleft over by history, they cost high business expense but receive low profit.In theory, this paper sums up the research theory and method of state-ownedbanks, reviews the development of China’ state-owned banks and analyzes its presentsituation of efficiency. In the empirical analysis, the paper collects10years data of14commercial banks in stock market from2002to2011to analyze its overall efficiency,scale efficiency and technical efficiency by DEA mode（lData envelopment analysis）.Through comparing the results of state-owned banks and joint-stock banks, the resultshows that the efficiency of state-owned banks is lower than that of joint-stock banksand only in short time does state-owned capital investment have positive effect onincreasing efficiency of state-owned banks.In order to push efficiency of state-owned banks going up, the effective ways areenhancing its risk control capability, optimizing its business management, setting upits advanced performance systems and improving its service quality and innovatingcapability.