Research On China's Commercial Banks Profit Model

The unceasing acceleration of the marketization process of interest rateintensifies the fierce competition degree of the financial industry. Thetraditional banking developed on the basis of the interest margin has enteredinto low ebb. The profit model focusing on the interest rate has suffered seriousimpact. Therefore, each commercial bank will regard the profit model as animportant task for realizing the sustainable development. Among them, to explorenew business with low risk and high profit is regarded as the main thought anddirection of improving profit.Under the premise of accepting the commercial banks’basic theory about profitmodel, this paper analyzes the literature about the profit model of thecommercial banks, makes comparison between the profit model of our domesticcommercial banks and the development experience of the developed areas, andpoints out the disadvantages in the profit model. Besides, it summarizes thegreat significance and necessity of our commercial banks’ transforming theprofit model, and puts forward countermeasures of the innovation and profitmodel of our domestic commercial banks and stock-holding banks.The main conclusion of this paper includes: the current profit model of ourdomestic commercial banks is focused on the profit margin business, and thesupport strength for the business innovation is severely insufficient, whichleads to high dependence of the business related to the interest rate and slowdevelopment of the intermediate business.The policy suggestions of this paper is to continuously push forward thebusiness innovation, promote pricing capacity of the intermediate businessproduct, increase the non-interest income which is focused on intermediatebusiness, and strengthen risk control on the intermediate business.