A Study On The Profitability Of China 's Commercial Banks And Its Influencing Factors

As the main part of financial market, the Commercial Banks play an important role in the development of national economy. They are more important in our economic development for the reason that direct financing function of the capital market is undeveloped in China. With the deepening of China’s financial system reform and the opening of financial market, domestic joint-equity commercial banks rise rapidly and foreign banks enter China gradually, which intensify the competition between banks. It is the profitability of Commercial Banks that result in the competition. So the research of profitability and the factors that affect the profitability of Chinese Commercial Banks will have important implications theoretically and practically. In recent years, many scholars have done some researches on these, but all the researches are irrelative and use outworn statics methods. As a result, it is really hard to discover the true relationship between the profitability and its affecting factors.Based on the prior studies and the development status of China’s Commercial Banks, we use the HLM model and data of 14 banks during 2001 to 2013 to analyze profitability and its affecting factors. This paper will be divided in five chapters. The first chapter focuses on the literature review. The second chapter will introduce the status and challenges of Chinese Commercial Banks. The third chapter use normative analysis method to analyze the profitability and its affecting factors. The fourth chapter will empirically test the relationships between profitability and its affecting factors by the HLM model. Based on the above chapters, the fifth chapter will put forward some statics to improve the performance of Chinese Commercial Banks.By knowing the affecting factors comprehensively and profoundly, can we take measures to improve the profitability of Chinese Commercial Bank and overall competitiveness, This is also the purpose of the study.