Research On Transformation Of Chinese Commercial Banks’ Profit Model

The implementation of the "commercial bank’s capital regulation" is the Chineseversion of the Basel Ⅲ from January1,2013.CBRC formed the four new regulatory toolson the basis of the existing regulatory system, the capital adequacy ratio, leverage ratio,provisions and liquidity ratios of system. It will have a tremendous impact on the role ofcommercial banks profit model and transformation of commercial banks’ profit modelwould be forced.Based on this new constraint of regulatory capital, this paper tries to study thetransformation of China’s commercial banks profit model on the basis of external andinternal factors. The transformation of commercial banks’ profit model which not onlyimprove their profitability and competitiveness, but also deepen financial reform and thetransformation of the national economy.This article is to find out a suitable model of the banking sectors, has studied thedomestic and foreign profit model theory, the evolution of international comparison, thestatus and necessary of China’s commercial banks profit model, empirical studies andsuggestions. The main content and contributions are as follows:Firstly, theory of profit model transformation. This paper argues that thetransformation of commercial banks’ profit model is the study of changes in the structureof its commercial banking revenues essentially by non-interest income and operatingincome.At the same time, the ultimate goal of commercial banks is to get the maximumprofit, profitability of commercial banks reflects the quality of banks’ profitability modeltransformation or profit model design.Secondly, international Comparison of commercial banks profit model.We analyzethe evolution of three countries (the United States, Germany and Switzerl) from thestructure, non-interest income revenue. Based on the analysis which most of non-interestincome obtained from the large commercial banks, we select ten largest banks from"Banker" to study commercial banks in developed countries and evolution of profit model through the effective integration of these two profit structural studies.Thirdly, By analyzing the present situation, necessity of profit model, the profitmodel transformation; China’s commercial banks in considering internal and externalfactors.we propose theoretical transformation path of China’s commercial banks’ profitmodel.Fourthly, For the overview of the content of the theory which content with therelevant empirical analysis. This paper argues that we analyze the transformation. Theprofit structure is the essential part of the transformation. Profit structure about empiricalresearch can clear relationship between banks operating profit and net interest incomeand fee-based business income. Empirical research is relative with China’s commercialbanks’ profitability model.In considering the impact of transformation, such as total assets,capital constraints, operating costs, the rate of change in CPI. We establish arandom-effects model for state-owned commercial banks, joint-stock banks.We analyzethe impact on the profitability of intermediate business income, thus providing empiricalsupport for the design and transformation of commercial banks’ profit model.Finally, We make four specific suggestions On the basis of the combination oftheory and empirical analysis of commercial banks’ profit model.such as, to maintainappropriate levels of interest income, to carry out capital-efficient business model type, tooptimize bank processes and profit model, to implement competitive differentiation profitmodel, and so on.We deeply expect that the transformation of China’s commercial banks’ profit modelis smooth and the banks will be better tomorrow.