The Research On Non-interest Income And Their Determinants Of Commercial Banks In China

Nowadays, the proportion of China’s non-interest income to total operating incomeshowed a rapid growth rate. By the end of2011, the average proportion is about20%.However, compared to Western countries, the proportion of non-interest income in commercialbanks of China is still low. It is in the primary stages of development of the non-interest income.Net fee and commission income is still the main source of China’s non-interest income. And itis influenced by the development of China’s economic fluctuations. What else, other types ofnon-interest income are higher volatility.First, this paper introduces the domestic and international research and the theories ofnon-interest income motivation. Then, it sums up the developing progress of non-interestbusiness of China’s commercial banks. Also, it sums up the characteristics of China’snon-interest business in nowadays as well as the opportunities and challenges. In theempirical part, it selects12commercial banks samples, using the panel data from2000-2011years to establish the regression model to examine the non-interest income and its influencingfactors relationship. The research results show that non-interest income is unrelated with thebank management level; The scale of bank assets and the net interest margin was positivelycorrelated; Control of bank operating costs helps improved non-interest income; Streamliningof the size of staff and enhance the customer relationships can stimulate the development ofnon-interest business;Fee and commission income is the main source of non-interest income.Finally, this paper throws out policy suggestions about how to develop the non-interestbusiness.