China's Commercial Banks Non-interest Income Empirical Research

With the continuous development of the economy in china, along with the financial liberalization and degree of internationalization, commercial banks has entered the spotlight and become a new economic growth point in financial market. The expansion and widening of the floating range of deposit and lending rates of the Central bank of China in2012, marking China’s entry into the new stage of interest rates liberalization. Under such circumstances, commercial bank have to deal with the fact that traditional sources of income like deposit and loan spreads has narrowed, making the change of the profit model and increase non-interest income channels become necessary.Recent years, with the continuous development of China’s economy, China has gradually emphasis on non-interest income business and increase its investment in this filed. The effect on bank’s profitability has been slowly showing. However, due to the ill-defined concept and slow development of non-interest income in our country, we still have a large gap in the services and projects when comparing with the U.S commercial banks. This paper begins by clarify the concept of non-interest income, then compare the current situation of commercial banks in U.S and china, identify the gap in our country. On this basis, this paper adopted financial data from11banks between2003and2011as samples, and then came to the conclusion of this paper.To conclude, under the strictly separate operation policy in China, our non-interest income business has relatively small range, with fewer types, and mainly dependent on the net fee and commission income; Empirical test found that the increase in non-interest income can improve the level of performance of the commercial banks. However, at the same time, the commercial banks should also attach importance to the cost of inputs, and not blind pursuit of non-interest income scale resulting in input costs outweigh the benefits. Finally, this paper also made recommendations on how to optimize our non-interest income business.