Research On The Influence Of The Diversification Of Income Structure On Performance In China Commercial Banks

At the present stage, the deposit and loan spreads narrowed, the customer needs become more and more diversified, a variety of non-bank financial alternative products have emerged, the financial supervision has been more and more strict and the competition in the financial sector increases continuously, which all put forward an urgent request to the diversified development of our commercial bank. Since 1990 s, diversification has become an inevitable trend of our commercial bank’s income structure and its impact on our bank’s performance level are worthy of attention. In this paper, we analyzed the relationship between different system commercial bank’s income structure and performance level, which has certain theoretical reference and practical significance to the future development of our bank.Based on the previous research, we selected the relevant data of 16 listed commercial banks from first quarter of 2008 to the third quarter of 2015 as sample data. We also divide it into state-owned commercial banks and non-state holding commercial banks. Then we exploit regression analysis to study the relationship between the diversification level of income structure and bank performance which based on panel data model. Regression results show that the diversification of our commercial bank’s income structure and business performance has a strong correlation. In the short term, expand non-interest income doesn’t bring significant benefits to our commercial banks, and even has negative effects on their performance level. But in the long run, promote diversified income structure of our commercial banks is conducive to improve the performance level of the bank, and the degree is greater than the current negative impact on bank efficiency. On the other hand, whether in the short or long term, the coefficient’s absolute value of state-owned commercial banks are higher than non-state holding commercial banks, which indicates the performance level’s influence of income structure from state-owned commercial banks is greater than non-state holding commercial banks. The main reasons are that state-owned banks have an absolute advantage both in outlets and fund size, the scale effect in the development of non-interest income business is far greater than non-state holding commercial banks which size and capital strength relatively weak. Finally, we put forward some targeted suggestions on how to optimize the income structure of the commercial bank, achieve the strategic transformation, and enhance the core competitiveness.