China’s Listed Commercial Banks Profitability Analysis Based On DuPont Analysis

With the speeding up of the financial internationalization, China’s banking industry has beenfully opened, International Banks operating the hundreds of years have entered China. Competitionis increasing in the domestic banking sector.Domestic Banks must face the competition offoreign Banks in profitability, corporate governance, asset quality pressure of competition,innovation ability, etc. Therefore, improving the profitability of commercial Banks has become thecore competitiveness in China’s banking industry.Profit maximization is the objective of a modern enterprise.Any decisions are made withoutprejudice to the public interest for the profits of an enterprise. Listed commercial banks controlthemselves with operational mechanism and management of modern enterprise mechanism. Aswith ordinary enterprises, listed commercial banks need pursue profit growth and improve theirprofitability, which is the survival and development of enterprises need.Compared with otherunlisted commercial Banks, listed commercial Banks have more standardized management patternin corporate governance, information disclosure, etc, Listed commercial Banks is a leading forcefor the future development of China’s banking industry. Therefore, the analysis and evaluation ofthe profitability of listed commercial banks, has a very positive sense.The article has carried on the empirical analysis based on the10listed commercial Banks asthe research object, using the experience of the dupont financial analysis method on theprofitability of listed commercial bank.In profitability analysis process, First, understanding thecontribution of commercial banks net interest income, intermediate business income, otheroperating income on bank profitability by analyzing return on assets; Second, understand the abilityto control costs for commercial banks by the decomposition analysis of commercial banksoperating expenses and having a comprehensive analysis of the impact of the commercial bankprofitability factors from the sources of income and expenditure angle. Finally, through thecommercial banks’ capital adequacy ratio, non-performing loan ratio, provision coverage, the costto income ratio statistics, the article evaluates and analysis of profitability of listed commercialbanks in China. On the basis of empirical analysis, the article points out the existing problems in the listed commercial banks operating in China, and puts forward suggestions for increasingthe profitability of the commercial banks in China for the questions.