An Empirical Study On The Effects Of Diversification In Lending Of China’s Commercial Banks

Since1949, the loan policy of commercial banks in China has experiencedthree phases, the investment orientations also gradually changed from highlycentralized to diversification. At present, with the competition fromforeign Banks and domestic financial agency, commercial banks have launcheda business diversification. But the interest income is still the main sourceof income for commercial Banks. So loan management is still the mainmanagement of commercial Banks. In the face the trend of increasinglydiversified commercial bank loans in China, diversified loans will becomethe new focus to improve our country commercial bank performance.At first, this paper theoretically analyses the diverse effect of theloan on the performance of Chinese commercial Banks loan, and then analysisabout the present situation of our country commercial bank loandiversification which found that the loan structure of commercial banks inour country presents the trend of diversification. On the basis of thisanalysis has carried on the empirical analysis: in our15listed commercialbank loans to influence business performance. Results show that regionalcommercial bank loans diversity can not only increase the risk of commercialbanks’ capital strength and operation resistance, it can still reduce themanagement risk of the commercial banks, namely to improve commercial banksbusiness performance.